What Not to Miss When Inspecting Your First Property

What a Property Inspection Actually Tells You

A property inspection before making an offer helps you identify repair costs that affect what you can borrow and what the property is worth. Lenders use the property as security, so structural issues or safety concerns can reduce your borrowing capacity or delay settlement if identified too late.

Consider a buyer looking at a Queenslander in Coorparoo with stumps, weatherboard cladding, and a raised subfloor. The property was listed within budget, and the suburb fit the location preferences. A building inspection revealed active termite damage in two load-bearing stumps and widespread rot in the subfloor joists. The repair quote came back at $42,000. The buyer's borrowing capacity was already stretched to meet the purchase price, and the lender's valuer noted the structural issues in their report. The loan offer was conditional on repairs being completed before settlement. The buyer negotiated a $30,000 price reduction, which covered most of the repair cost, and the contract proceeded with a clause requiring the seller to complete remediation before the settlement date.

Without the inspection, those repairs would have surfaced during the bank valuation, potentially collapsing the sale or forcing the buyer to cover the shortfall out of pocket after signing a binding contract.

Structural Red Flags That Affect Loan Approval

Lenders will not approve a loan on a property with structural defects that compromise safety or livability until those issues are resolved. Cracking in brick walls, sagging rooflines, and water damage around wet areas are the most common problems flagged during valuations.

When you arrange a building inspection, the report should clearly separate cosmetic wear from structural concerns. Cosmetic issues like worn carpet or dated kitchens do not affect loan approval. Structural issues like subsidence, roof leaks, or electrical faults flagged as safety hazards will delay or prevent settlement until rectified.

In Brisbane, older homes in suburbs like Morningside, New Farm, and Bulimba often have timber stumps and hardwood frames that can hide termite activity or timber rot beneath the paint. A pest inspection is a separate report from the building inspection and should be completed at the same time. Most lenders will require both if you are purchasing an older property, particularly if it is timber-framed or has a raised subfloor.

How Renovation Costs Affect Your Deposit and Borrowing Capacity

If a property needs work before it is livable, you need to account for that cost upfront. Lenders assess your borrowing capacity based on your income, liabilities, and expenses. If the property requires $20,000 in immediate repairs and you have already committed your full deposit and settlement costs, you will not have the cash to complete the work after settlement.

Some buyers assume they can roll renovation costs into the home loan, but most lenders will not increase the loan amount above the purchase price for cosmetic renovations. Structural repairs required before settlement must either be funded separately, negotiated as a price reduction, or completed by the seller as a condition of the contract.

If you are purchasing a property that needs minor cosmetic updates like painting, flooring, or kitchen replacement, you may be able to include those costs in your loan if the total loan amount remains within 80% of the property's post-renovation value. This requires an "as if complete" valuation and is more commonly available for investment properties or where the buyer has a larger deposit. For first home buyers using a low deposit option like the Australian Government 5% Deposit Scheme, the loan must be limited to the purchase price, so renovation funds need to come from savings or a separate line of credit.

What to Check in the Neighbourhood Before You Commit

The condition of the property is only part of the decision. The location affects resale value, rental demand if your circumstances change, and your day-to-day costs like transport, childcare, and insurance.

Walk the street at different times of day, particularly in the evening and on weekends. Traffic noise, proximity to main roads, and parking availability are harder to assess during a single daytime inspection. If you are looking in areas close to the Brisbane CBD like New Farm or Morningside, check flood maps and council overlays for heritage listings, airport noise zones, or future infrastructure projects that could affect property values.

Brisbane City Council's online mapping tool shows flood risk, bushfire zones, and planned road or transport upgrades. A property in a flood-affected area may require higher building insurance, and some lenders apply stricter lending criteria or lower loan-to-value ratios in high-risk zones. If the property is in a flood zone and you are applying under the 5% Deposit Scheme, confirm with your broker whether the lender on the panel will accept the property as security before making an offer.

Strata Reports and Body Corporate Records for Units and Townhouses

If you are buying a unit, townhouse, or apartment, request a copy of the body corporate records and the most recent strata report before signing a contract. The strata report shows the financial position of the body corporate, any upcoming special levies, and the condition of common property like roofs, driveways, and shared walls.

A body corporate with low reserves and deferred maintenance is a warning sign. If a special levy is issued after you settle, you are liable for that cost on top of your regular body corporate fees. Lenders may also decline a loan if the body corporate is in financial distress or if the building has unresolved defects.

In Brisbane, many older apartment blocks built in the 1970s and 1980s are now facing significant remediation costs for concrete cancer, waterproofing, and fire safety upgrades. These costs can run into tens of thousands of dollars per unit. The strata report should include a building condition assessment and a sinking fund forecast. If the sinking fund balance is below the recommended level or if a major works project is flagged in the next two years, factor that cost into your budget.

Pre-Purchase Property Inspections and Contract Clauses

Most contracts in Queensland are signed subject to a building and pest inspection clause, which gives you a set period to complete inspections and withdraw from the contract if the reports reveal issues you are not willing to accept. The clause should specify the number of days you have to complete inspections and the conditions under which you can terminate without penalty.

If you are buying at auction or under a contract with no cooling-off period, arrange the building and pest inspections before the auction date. You cannot withdraw from an auction contract once the hammer falls, so any issues identified after that point become your responsibility.

When you receive the inspection reports, review them with your broker before deciding whether to proceed, renegotiate, or withdraw. Some issues are minor and can be resolved inexpensively. Others, like structural movement, asbestos in wall cladding, or non-compliant electrical work, may require specialist quotes and council permits to rectify. Your broker can help you assess whether the cost of repairs affects your borrowing capacity or whether a price reduction would bring the property back within budget.

Insurance, Settlement Costs, and Final Walkthroughs

Once your loan is approved and the contract is moving toward settlement, arrange building and contents insurance to start from the settlement date. If you are purchasing in a flood-prone area or a bushfire zone, obtain quotes early. Some insurers apply higher premiums or exclude certain types of damage in high-risk postcodes, and you need to know that cost before you settle.

A final walkthrough inspection should be completed within a few days of settlement. This inspection confirms that the property is in the same condition as when you signed the contract, that any agreed repairs have been completed, and that fixtures and fittings listed in the contract are still in place. If the seller has removed items that were included in the sale or if new damage has occurred, you can raise it with your conveyancer before settlement proceeds.

If you are purchasing a property that requires immediate repairs or where the seller has agreed to complete work before settlement, include a clause in the contract that allows you to reinspect the property and withhold settlement if the work is not completed to a satisfactory standard. Your conveyancer can arrange for a portion of the sale price to be held in trust until the repairs are verified.

If you are ready to move forward with a property or want to confirm whether a specific property fits your budget and borrowing capacity, call one of our team or book an appointment at a time that works for you. We work with first home buyers across Brisbane and can help you assess your loan options, deposit requirements, and eligibility for state and federal schemes before you make an offer.

Frequently Asked Questions