A pre-settlement inspection is generally carried out in the last week before settlement. If you are buying a house, this is your final chance to examine the property before you officially own it.
Is it necessary to carry out a pre-settlement inspection?
A pre-settlement inspection is one of the last steps in a property purchase. It allows the buyer to inspect the house one last time before the settlement date to make sure nothing has changed for the worse since the exchange of contracts.
While it’s not mandatory to inspect a house before settlement, it’s generally advisable not to skip this step. A lot can change since you first exchange contracts on a property, especially if someone was living in the house at that time. A stain on the carpet, a broken tile, a leaking faucet, or a non-functional oven – these are all possible issues that can crop up in the days leading to settlement and become your responsibility once the ownership passes on to you.
A pre-settlement inspection is also a good time to check that any special conditions have been met. For instance, if you were told the carpets would be replaced before the ownership of the house passes to you, pre-settlement inspection is the time to check whether or not that condition has been fulfilled.
What are the top things to look out for during a pre-settlement inspection?
All pre-settlement inspections are not the same. However, a good starting point for most inspections is double-checking all the items included in the sale contract. For instance, dishwashers, ovens, light fixtures and curtains are typically included in the sale. It means the seller cannot remove these things from the house unless explicitly listed in the contract of sale. It’s also worth checking the condition of the various fitments and fixtures in the house.
Is the dishwasher working properly? Are all the lights working? Have any new stains popped up on the carpet?
The property may have suffered some damage since you last saw it. This can sometimes happen when the current occupants of the house are moving out. They may accidentally bump a window while carrying their luggage or not bother to repair the oven that stopped working before they left. It’s also possible that the house was flooded when no one was living there or some pests found their way into the property, spoiling the carpet and other furniture.
While these may sound like minor issues, the seller can have these problems fixed if you discover them before settlement. The basic idea is that you should receive the house in the same condition as agreed upon in the sale contract.
If the house was recently vacated, you should also check for any rubbish left behind by the occupants of the house. There may be some trash in the garden or cartons that got left behind. If you ignore these things, they will likely be your headache to deal with after settlement.
What should I do if I am dissatisfied after the pre-settlement inspection?
If you find that everything is not in order during a pre-settlement inspection, you are well within your rights to delay the settlement until all the issues are resolved to your satisfaction.
Immediately inform your real estate agent and conveyancer of any discrepancies during the pre-settlement inspection. They will notify the seller and negotiate a satisfactory solution, such as delaying property settlement until all the problems are fixed or securing a discount to cover the cost of repairs post-settlement.
