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Buying a home

What is a pre-settlement inspection and why do I need to do it?

10 March 2018

It is almost time. You’ve been saving your pennies, you’ve fallen in love with a suburb, made an offer on the home of your dreams and it was accepted. You finally own your own home.

It’s tempting to grab the keys and run in the doors and claim it as your own, but there is one step that can make all the difference between living in the home of your dreams, or your nightmare.

Before paying the settlement money, you must do a pre-settlement inspection. This is where you – and whoever you choose to bring along – inspect the property to make sure it is in the condition that is stipulated in the contract of sale. But what does that mean? What are you supposed to be looking for? Here are some tips to save you from a potential disaster.

When do you do it?

The pre-settlement inspection is usually done the week before picking up the keys to the property. You can negotiate to do it earlier, but be careful not to inspect it too early, as many things can go wrong before you move in.

The reason why most people inspect a week before is so there is enough time for the current owners (or builders if buying a brand-new home) to make any minor corrections.

Who is involved?

Most people who buy a home aren’t master builders or tradies, so how is Joe Punter supposed to know what to look for?

If you have bought an existing property, often you will inspect the home with the real estate agent. You can also request that the previous owner is present during the inspection, though this is not always possible (it can be a great opportunity to quiz the previous owner about general household issues).

If you want to be overly cautious, you can take along your own independent realtor or conveyancer that will be able to interpret and resolve any issues that may arise.

Taking a parent or your spouse along can be a good idea, but also factor in that they will be focusing on other things, like ‘where is the couch going to go?’, ‘is that the neighbour’s dog barking?’, ‘I wonder if we can install a disco ball to replace that chandelier’.

In the event you have built a brand-new home, take a builder or someone with experience in construction who will notice things that might slip you by. Details such as correct light fittings, window locks and hinges may be inconspicuous to the layman, but will affect you greatly once you move in.

What do you look for?

The general idea of a pre-settlement inspection is to make sure you move into a property that is in the same condition as when you bought it. It is also important to ensure that the sellers have obeyed any specific requests you may have agreed on when you paid your deposit.

Significant damage

The key word here to focus on is ‘significant’.

In the event you have bought an existing property, usually there will be people living in it before you move in. It is therefore a fair assumption that those owners will be moving out before you move in. As the current owners pack up their belongings, accidents can happen. Some less-honest sellers may try to cover up these accidents.

It would not be unreasonable to expect issues such as holes in the wall, destroyed carpets or broken windows to be fixed before you move in, if they were damaged after you signed the contract of sale. If the windows were already broken before you bought the property, there may not be anything you can do – you bought the property ‘as is’.

Gathering of dust or a couple of blown light globes would constitute as general wear and tear, which is not the responsibility of the seller.

Determining damage can fall into a grey area, issues such as holes in the wall left behind by a wall-mounted television may not be considered damage. Consult the contract of sale and your conveyancer or lawyer to determine where the line in the sand is drawn.

Inclusions, exclusions and special conditions

During the negotiation process, you may have requested for special conditions as part of the sale. It is not uncommon to request some inclusions, such as a television in custom-built cabinetry, curtains or a particular piece of furniture.

The seller may have outlined exclusions as well, such as the removal of certain fixtures (which are usually included in the sale) such as the dishwasher, oven or light fittings.

Some buyers also make specific requests or have special conditions. If the buyer is particularly displeased with a broken or destroyed feature, like a door off its hinge, the seller is responsible for making your request happen before the transfer of property.

This pre-settlement inspection is your opportunity to ensure that all of these things have happened and that you are moving into a home that is in the condition that is agreed to in the contract of sale.

What if there are problems?

If you walk away from the inspection unsatisfied for whatever reason, it is important to let your conveyancer know immediately. Delaying the settlement can result in extra costs for you and the seller as schedules are pushed back.

The most important reason for a pre-settlement inspection is that you can walk into the property you bought and get off to a great start. If you are not happy, make it known and get it sorted as soon as possible.

Getting ready to move?

If you’re about to move home, there are a few tasks you’ll need to complete so that everything runs smoothly. Whether you’re connecting your utilities like electricity and gas, or organising your removal van, there are a range of services available to assist you with your next move.

Explore Moving Home Services

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Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.