How buying works in NSW: offer, exchange, cooling-off, settlement
Most of the pages that rank for this question are written for Victoria, where the cooling-off period is 3 business days and the penalty is 0.2%, or for no state at all. NSW is different and the difference is the whole answer, so here is the sequence.
- Offer. You make an offer, usually through the agent. The vendor accepts it. Nothing is binding yet: in NSW an accepted offer is an intention, not a contract.
- Exchange. Both parties sign identical contracts and swap them. Now you are bound. On a private-treaty sale, the cooling-off period starts here.
- Cooling-off. 5 business days, ending at 5pm on day 5, during which you can withdraw at a cost of 0.25% of the price. Not at auction. The mechanics are in the cooling-off period NSW guide.
- Settlement. Typically 6 weeks after exchange, when the balance is paid and the keys change hands. After this, the house and everything in it is yours.
The inspection can happen at step 1, between step 1 and step 2, or inside step 3. It cannot usefully happen after step 3.
Inspecting before you make an offer
| For | Against |
|---|---|
| You offer with the report in hand, so the price already reflects what you found. | You pay for a report on every house you seriously consider, including the ones you lose. |
| No clock: you can get an engineer's opinion or a treatment quote before you commit to anything. | On a hot property, another buyer may exchange while you are waiting for a report. |
| The strongest position for an unconditional offer, if your conveyancer recommends one. | The agent may not hold the property for you while you inspect; nothing obliges them to. |
Inspecting after the offer is accepted, before exchange
| For | Against |
|---|---|
| You only pay for a report on a house you have agreed a price on. | You are still exposed to gazumping until exchange, and the inspection is 1 more day for that to happen. |
| The report can shape the contract before you sign it, via your conveyancer. | The agent will push to exchange quickly. A report the same day is what makes this timing workable. |
| No 0.25% to walk away, because you have not exchanged. | If the vendor will not wait, you are back to the cooling-off option. |
Inspecting inside the cooling-off period
This is the timing most Sydney buyers end up using, and it works: exchange, book the same day, inspect within a day or 2, report the same day, decide before 5pm on day 5. The cost of walking away is 0.25% of the price. The advantage is certainty: you are exchanged, so nobody can gazump you, and you have a priced exit if the report finds something. The disadvantage is the clock, which is why the inspector’s report time matters more here than anywhere else. The full day-by-day plan is in the cooling-off guide.
Offer Accepted? Book The Inspection Today.
Building and timber pest in 1 visit, your report the same day, timed to your exchange or your cooling-off end date.
Buying at auction: no cooling-off, so inspect before you bid
At auction the fall of the hammer is exchange, there is no cooling-off period, and the deposit is paid on the day. Every serious bidder inspects beforehand, and the vendor’s agent expects it. The awkward economics are real: you may pay for reports on 2 or 3 houses before you win one. Compare that to bidding blind on a 1950s house on Sydney clay and finding the termites at settlement. If the vendor has commissioned a report and the agent offers it, read it, and then read the section below on relying on it.
Gazumping in NSW and why inspection speed matters
Gazumping is when the vendor accepts your offer and then accepts a higher one from someone else before you exchange. In NSW it is legal, because an accepted offer is not binding until exchange. Every day between acceptance and exchange is a day it can happen, and “we’re waiting on the building report” is the most common reason buyers give for the gap. A report that takes 3 business days is 3 days of exposure. A report the same day is 1. That is not a sales line; it is the reason the turnaround is the number we lead with.
The decision table, by sale method
| How you're buying | When to inspect | Why |
|---|---|---|
| Private treaty, competitive | Inside the cooling-off period, booked on the day of exchange | Exchanging first removes the gazumping risk; the 5 days and the 0.25% give you a priced exit. |
| Private treaty, no competition | After acceptance, before exchange | No 0.25% to walk, and the report can shape the contract. Only works if the vendor will wait. |
| Auction | Before auction day | No cooling-off. The report is your only window. |
| Pre-auction offer | Before you make the offer, or as a condition of it via your conveyancer | A pre-auction offer is usually expected to be unconditional, which means a 66W certificate. Inspect first. |
| Off the plan | Stage and handover inspections during and at the end of the build | There is no house to inspect at exchange. The 10-day cooling-off is a contract question for your conveyancer. |
What the inspection covers
Whichever timing you choose, the inspection is the same: the structure, the roof by drone, the roof void, the subfloor, the interior, the wet areas, the site drainage and the outbuildings, plus the timber pest inspection to AS 4349.3-2010 in the same visit, with the thermal camera and moisture meter included. Element by element, it is the what a building inspection covers guide.
Using the report to negotiate: price, repairs, or walking away
This is the canonical version of the advice; the service pages link here rather than repeating it. Three things to know before you use a report as a negotiating document.
- The vendor is not obliged to fix or discount anything. A report gives you a reason to ask; it does not give you a right. What it does is make the ask specific: the defect, its location, its severity, and the kind of specialist who would quote the fix.
- Separate the major from the minor before you go in. A list of 40 items, 38 of them cosmetic, weakens the 2 that matter. The summary page of the report does that separation for you; lead with it.
- The conversation goes through your conveyancer, especially inside the cooling-off period, when your options are set by the contract and the deadline. The inspector supplies the facts; the conveyancer supplies the leverage.
Meena Ahn, Google review: “Swift and proactive with their communication and organising the building inspections. Reports were completed very quickly, and what I received was very clear, precise, and thorough. I was able to make my property purchase decisions with confidence (I rescinded on one based on their report), and gave me more points for my negotiations for my new one.” That is the report doing both jobs, on 2 different houses.
Can I rely on the vendor’s report?
Read it; do not rely on it. A vendor-supplied report was commissioned and paid for by the person selling the house. It may be entirely accurate. It was not written for you, you have no relationship with the inspector, and you cannot ring them with a question. It is useful as a preview of what your own inspection is likely to find and as a flag for anything the vendor already knows about. Then get your own.
A timeline that works in Sydney, in 3 steps
- Exchange, or offer accepted: call the same day and say which it is and what your deadline is.
- Inspection within a day or 2: structure and timber pests in 1 visit, no second appointment.
- Report the same day, decision with days to spare: proceed, renegotiate, or walk, with your conveyancer.
The full day-by-day version, with the public-holiday arithmetic and the 66W trap, is the cooling-off period guide. What the inspection costs relative to the 0.25% is the cost page.