Should Melbourne Home Sellers Pay for Building and Pest Reports? What Victoria's Proposed Reforms Mean for Buyers and Vendors

Under reforms flagged by the Victorian Labor government, home sellers may be required to commission and provide a building and pest inspection report before listing a property for sale. If legislated, this would shift a cost currently borne repeatedly by competing buyers — typically $400–$600 per inspection in Melbourne — onto the vendor, who pays once. The change is not yet law, but understanding how it works now and how it may change prepares both buyers and sellers for a shifting market.

Why the Current System Creates Frustration

Under Victoria's existing rules, sellers have no obligation to provide a building report. Buyers commission their own inspections, usually after signing a contract subject to a building clause, or before bidding at auction where no cooling-off period applies to properties bought at auction.

The practical result: a buyer competing at five auctions may spend $2,000–$3,000 on inspections before securing a property. On Reddit forums and in buyer advocacy circles, questions like "how many building inspections before buying is normal?" and "why do I keep paying $500 and losing?" are common. The answer is: under the current regime, that cost is simply the price of due diligence at auction.

Buyers are also encouraged by the Victorian government to organise pre-purchase building inspections before committing to a contract, particularly for older homes where hidden structural issues may exist.

What the Proposed Victorian Reforms Would Change

Victoria's proposed vendor disclosure reforms — modelled loosely on Queensland's system — would require sellers to attach a vendor due diligence report to the Section 32 Vendor’s Statement required under the Sale of Land Act 1962 (Vic) before a property hits the market. The building and pest component would be conducted by a licensed inspector, with the report made available to all prospective buyers.

The proposal has been discussed as part of broader vendor disclosure reform being examined by the Victorian government to improve transparency and reduce duplicated costs for buyers.

Key implications for the Melbourne market:

For sellers: One upfront cost (typically $500–$800 for a combined building and pest report) replaces the current practice of buyers each commissioning their own. A clean, professionally prepared report can actively support a vendor's asking price by reducing buyer uncertainty.

For buyers: Access to a standardised report before auction removes one layer of pre-purchase cost and risk, though buyers retain the right to commission their own independent inspection if they want a second opinion.

Timing and legal status: As of mid-2025, the reforms remain a proposal. Property lawyers and conveyancers are monitoring the legislative timeline closely; no commencement date has been confirmed.

Can You Still Negotiate Price After a Building Inspection?

Yes — and this is where the reforms become strategically important. A vendor-supplied report does not eliminate negotiation; it reframes it. If a report discloses significant defects (rising damp, structural movement, roof deterioration), buyers can use those findings to support a price adjustment or a conditional offer.

The distinction between minor and major defects matters considerably. A report noting cosmetic cracking is categorically different from one identifying subfloor timber damage or non-compliant roof framing. Buyers who understand how to read a report — and frame a realistic offer accordingly — are better positioned than those who react to alarming language without context.

In some cases, inspection reports also identify issues that affect accessibility or safe use of a home — such as uneven pathways, steep entry steps, or bathrooms unsuitable for mobility aids. Addressing these concerns early can be important for long-term livability, and specialist providers such as Mobility Access Modifications assist Melbourne homeowners with accessibility upgrades like ramps, bathroom modifications, and safe entry solutions.

How a Specialist Can Help Navigate the Transition

For sellers, strategically commissioning a pre-sale report — and presenting it transparently — can build buyer confidence and reduce last-minute price chipping. For buyers, interpreting defect categories and understanding how findings translate to negotiation leverage requires both technical literacy and local market knowledge.

Forge Real Estate works with both sides of this dynamic: advising vendors on how to use vendor due diligence reports to support pricing strategy, and helping buyers assess true risk from inspection findings and structure offers — including price adjustments or conditional terms — that reflect the realities of Melbourne's auction-heavy market.

What First Home Buyers Should Know

First home buyers face particular exposure under the current system, often underestimating inspection costs or skipping them entirely to save money. The proposed reforms, if passed, would lower that barrier. In the interim, budgeting $500–$600 per inspection and prioritising properties where a pre-auction inspection is permitted by the vendor remains the most prudent approach.

A conveyancer or property lawyer can also review the Section 32 vendor’s statement for legal red flags before an inspection fee is committed.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

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