They made an offer to buy their first home. Then they learnt the building report had been doctored

The first sign that something might be off with the home Estelle Forrest agreed to buy in May was the phone number of the inspector who did the building report given to her by her estate agent. One digit had been changed.

The young mother and her husband, Josh, had told the agent they would make an offer on the Mooroolbark townhouse conditional on finance and a building and pest report to check for defects.

But their agent at Okas Real Estate told them via text that the vendor “has already arranged a building and pest inspection report and is ideally looking for offers with minimal conditions”. She said the April 2026 report was done by an independent, licensed building inspector.

The agent texted that she was “happy to share the report once you make an offer”. It had been commissioned by a previous potential buyer whose finance had fallen through, the Forrests were told.

The couple agreed to remove the building report condition on their offer for the house they believe was built about 2020, and were sent a 72-page document.

What happened to them has some property experts suggesting the state government’s planned cost-saving scheme for prospective buyers, under which vendors must provide building reports, might put home buyers at risk.

The scheme will require sellers to organise and pay for inspection reports and give them to all potential buyers, saving them up to thousands of dollars.

Research from the not-for-profit Consumer Policy Research Centre found in 2022 that some Victorians pay for seven such reports, believing they need them for certainty before bidding at auction, often only to discover that due to rife underquoting they have wasted their money.

“We had been looking [for a home] since the start of the year, and had to use the Help to Buy scheme as there was no other way to afford a house at the moment,” said Estelle Forrest, who works in tourism services.

“Our daughter is eight months old, and we needed to find somewhere we could afford and that would look after us as a young family. We found this property, and the main thing that attracted us to it is we thought it would be low maintenance and need no major repairs.”

On page five of the report they were sent, under the summary of major defects and safety hazards was “CONCLUSION: No major defects found”.

“The vendor accepted our offer,” said Forrest. “Then a few weeks later … I tried to call the builder who did the report.”

When she found his correct phone number, the inspector revealed she did not have the whole report. The original detailed major defects. She bought it from him for $395, “and it showed there were pages missing”.

Major defects highlighted in the original, as seen by this masthead, include heavy dampness in the building’s subfloor “that has the potential to cause major structural defects … may cause fungal decay, mould and footing problems”.

The inspector concluded in the original: “The incidence of major defects in this residential building as compared with similar buildings is HIGH.”

Both his summary of defects and hazards and photos and details of the subfloor had been removed in the document forwarded by the agent. The horrified couple tried to cancel the sale, but the vendor’s lawyer threatened them with penalty interest and rescheduling fees should they delay.

Vishal Safi, a director at Okas Real Estate, conceded to this masthead that the reports did not match, but said he had no idea what had happened. On Friday, after receiving questions from The Age, he intervened to have the contract ended and the Forrests’ deposit returned, and on Saturday he apologised in writing to the couple.

He said he would appoint an auditor to examine how the original 75-page report was altered.

Cate Bakos, prominent buyer’s advocate and board chair of Property Investment Professionals of Australia, said the case illustrated risks she was aware from agents in the ACT, where it is already mandatory for vendors to supply building reports.

“I’ve spoken to selling agents who have said they would shop around until they got a building inspection report that looked a bit more palatable. They can get as many as they want,” she said. “You can always find a building inspector who is a bit more of a lax inspector.”

Bakos, ex-president of the Real Estate Buyers Agents Association of Australia, said, “I am very anti this new process”, and that the government should focus on stamping out underquoting.

“The inspectors and agents are going to get chummy. The agents will be the source of their work, and agents will say [to vendors], ‘Let us make that [finding a building inspector] part of our process.’”

Such closeness could, for example, lead to major defects being downgraded to minor defects: “If a dodgy agent knows a building inspector who tends to be a bit more lax, they will recommend them.”The Age does not suggest that Okas Real Estate or Safi used a lax or overly favourable building inspector in this case.

“Underquoting is disadvantaging buyers investing in the process,” said Bakos. “The government thinks it is removing that $800 barrier to bidding, but instead they’re creating a false sense of security. The good guys [agents] are worried sick about it.”

Jacob Caine, president of the Real Estate Institute of Victoria (REIV), said the Forrests’ case “illustrates observations and analysis we provided to the government” about protections needed in its proposed scheme, due to be legislated in 2027.

The group gave the government 13 recommendations around “trying to clean up and make the auction system, buying and selling real estate in Victoria more transparent and trustworthy”, including about what is needed in the new building report scheme.

Legislation would need to include additional licensing and certification for building inspectors and penalties “to disincentivise these malign, unethical and illegal practices”, he said.

A Victorian government spokesperson said no home buyer should have the biggest purchase of their life ruined by deceptive and illegal conduct.

“Our reforms will make vendors responsible for inspections to save buyers time and money, with safeguards and strong penalties for those that break the law,” the spokesperson said.

Under the Sale of Land Act, sellers and agents are prohibited from making or publishing any statement that they know to be misleading or deceptive or from knowingly concealing any material facts, such as awareness of a prior test or investigation having revealed a defect or pest infestation. Breaches carry a maximum penalty of more than $48,000 or up to 12 months’ imprisonment.

Professional conduct obligations apply to estate agents when providing information to buyers, and it is an offence to engage in misleading or deceptive conduct, with harsh penalties under Australian consumer law.

The REIV had earlier recommended to the Victorian government that provision of a building and pest inspection report by an authorised registered inspector be included in the Section 32 vendor’s statement, the cost to be borne by the eventual buyer. It had suggested exemptions, including to properties less than seven years old.

But Jacob Caine said that while doing on-air interviews about the proposed scheme, he had been concerned to receive talkback calls from building inspectors who said some in their industry were untrustworthy and warning of “shabby operators”.

“The building inspection sector itself identified they’ve got a problem; they need to sort that out as a sector just as the real estate sector needs to sort out sections of it that are underquoting,” he said.

Consumer Research Policy Centre chief executive Erin Turner said the new scheme would benefit buyers, 17 per cent of whom its data shows believe they can’t afford or don’t have time to get a building report, and another 17 per cent of whom pay for reports on seven or more properties.

She said it was often first home buyers stung by poor practices in the real estate industry, and that the proposed scheme would make such a significant purchase safer.

“This [mandated building reports] is a really important protection that’s currently missing; we know it’s going to help particularly first home-buyers,” she said. But strong protections against fraud would need to be included, as well as clear consequences.

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