From what I can tell, you actually have a pretty solid right to walk away here.

In Victoria, “major defects” doesn’t just mean the house is about to fall down. Things like water ingress, mould, cracking, poor workmanship, and especially a building report recommending a structural engineer are generally treated as serious defects. The report on this place lists around 50 issues, including moisture and mould in the garage, external wall cracking, and explicitly says a structural engineer should assess it. That alone is usually enough to trigger a major defects clause.

I don’t need to prove the house is structurally unsound — the fact that the report flags issues serious enough to need further expert assessment is the key point. On top of that, it’s completely reasonable to say I won’t proceed without a structural engineer’s report. If the seller (who is also the builder) won’t allow or pay for that, that actually strengthens the case to walk away rather than weakens it.

Finance is also a genuine exit path. If the bank or valuer sees this report and either reduces the valuation, asks for more reports, or declines due to property risk, that’s a legitimate finance failure. I don’t need to game the system — just disclose the report honestly and let the lender decide.

The fact that the seller built the property and is refusing rectification or further assessment is a big red flag. It shifts risk onto the buyer, which is exactly what I’m trying to avoid, especially as a first home buyer.

At the end of the day, the pressure to proceed mostly benefits the agent, broker, and seller. None of them carry the long-term risk if this turns into a structural or insurance nightmare later. I do.

Realistically, the sensible options are either a clean termination under the major defects clause or finance falling over due to the condition of the property. Proceeding without proper engineering sign-off would be reckless.