Pre-Settlement Inspection Checklist
Is your new house or apartment a done deal? Then it’s time for you to take up the pre-settlement inspection checklist.
A pre-settlement inspection is the final inspection of the property before the property exchanges hands but after the contract has been signed, to make sure that everything is in order and there are no damages or changes in between that time to the condition of the property.
Buyers may have already done thorough inspections the first time before signing contracts, but this final one is crucial to a successful deal and makes sure there is no room left for problems. Additionally, it maps out a new owner’s pre-settlement inspection rights and what to expect of the seller at this time.
Consider this complete inspection checklist especially if you are a first home buyer to perform all due diligence and use it to have a clear communication with your conveyancer regarding all final settlement conditions in your property purchase.
Who Should Inspect the Property?
As the buyer, it is your responsibility to inspect the property. You may bring a witness to the inspection; in most cases, that witness is your real estate agent. You should discuss with your agent whether the seller should be present. If you’re part of a private deal, then the seller is present as the witness.
You can also bring two additional people to the inspection, per the Joint Form of General Conditions on the Sale of Land, Section 5.1. That person can be a family member, or a friend; someone who is invested in the house or simply present to support you in the inspection.
The real estate agent is present so that the buyer and real estate agent can document any findings and start to work on a strategy to address any problems or negotiate prices on the sale. In most home sales, the buyer is entitled to only one pre-settlement inspection which makes it imperative that you discuss any issues with your agent on the spot and arrange to have them covered.
When Should You Inspect the Property?
There is a 30 to 90-day settlement period after signing the sales contract for a property and most inspections finish about a week before final settlement to leave time for last minute corrections and adjustments. It is best to have your final inspection close to the end of the settlement period to see the property in its most recent state [as long as it is at least a week before the settlement].
The buyer should consult their respective state government rules on inspection and settlements as there is no official pre-settlement inspection policy in Australia. This can be done by visiting the relevant state government’s website.
For example, Victoria stipulates that the final inspection occur at any reasonable time, roughly a week before the settlement. South Australia, on the other hand, leaves it up to the choice of the buyer and agent and inspection only takes place if it is mentioned as an agreed entitlement for the buyer in the contract.
There are, though, some assumptions that apply country-wide as per the General Conditions. For example, the final pre-settlement inspection needs to occur on a business day between 9 a.m. and 4 p.m., per Section 5.2. Additionally, it should be clear that the inspection does not take too long and finishes in as little as 30 to 40 minutes especially when there are people living on the property at the time.
What to Look for in the Inspection?
Home inspections vary by case and agreed-upon inclusions and exclusions influence every inspection. Additionally, what gets examined in the final inspection depends on the discoveries during the initial inspection of the property. That means there is no fixed template for what should or could be in the final inspection.
That said, the list below contains the most common items in the final inspection but is not all-inclusive or a standard for all. This pre-settlement inspection checklist can be especially useful for apartment buyers and inspection of townhouse properties but can be used for other home property buyers as well.
The term damage, in this case, means anything that the seller is required to fix before handing over the property. The list of what qualifies is diverse and can vary widely depending on the state of the property.
For example, puncture holes or visible cracks in the walls could be considered damage. In addition, issues like broken plumbing or fixtures, door handles & knobs, or windows could all come under damage. The purpose of listing damage is to ensure the buyer gets their investment’s worth out of the property.
Damage should be the first thing you should look for as you take a walk around the property so that the seller has sufficient time to fix it.
Utilities cover essentials that are normally considered as a ‘utility’ such as water, electricity, and gas. It can also include essential services like a telephone service or the various parts or equipment that facilitate power.
Any power issues should be brought up with the seller since you wouldn’t want to move into a house with basic utility problems. If the issue is wiring-related, the real estate agent should timely coordinate getting an electrician in to test the integrity of the wiring system.
Here are various pieces of equipment that need inspecting:
- Verify that switchboards, doorbells, external lighting, power outlets, and telephone lines work
- Test gas stoves and heating systems and ensure they function and function safely
- Test all heating and air conditioning systems, including looking at any air-conditioner filters and water heaters
- Verify water flow is present and functioning in all sinks, tubs, and hookups
- Identify any areas that show flooding damage from plumbing issues or overflow
Fixtures & Fittings
Fixtures and fittings play a large part in any home sale and everything should be accounted for before the deal is officially settled to ensure that all parties are aware of the property conditions on the seller/tenants vacating the property.
Fixtures are anything that is permanently attached to the home. They must be secured to the walls or floors and not removed when selling the house. Examples include, but are not limited to:
- Light Fittings
- Sinks, toilets & bathtubs
- Plugs & Sockets
- Kitchen & bathroom plumbing [check for hot & cold water taps, leaks in water taps, clogged sewage systems]
- Built-in cupboard & wardrobes
- Central Heating/Cooling Systems [Heater/Air-Cooler/Ceiling Fans]
- Ventilation Systems [Exhaust fans]
- Security & Smoke Alarms
Fittings are items separate from the home’s structure and are free-standing. These fittings can be removed upon the home’s sale if you wish. Fittings include:
- Kitchen appliances
- Washing machine
Any items not covered in the final contract can be removed from the home. All fixtures and fittings should be listed, and both buyer and seller should agree to their disposition and ensure contract compliance.
Cleanliness & Garbage Disposal
Inspecting the property post-sale to determine its state of tidiness is an important part of the pre-settlement period.
Make sure to check if anything got left over that was the seller’s responsibility to remove. The property must be free from rubbish, vehicles, chattels [personal items of the seller or the previous occupants like pieces of furniture etc.] which are covered in the Possession & Rent section of Joint Form of General Conditions.
Garbage must be cleaned up, and all required rubbish bins should be present and accounted for in a clean condition upon transfer of ownership. These can include General Waste Bins, FOGO – Food Organics & Garden Organics, Recyclable or Plastic Waste, & Glass Waste Bins.
Other items in a apartment or house inspection list include, but are not limited to:
- Outdoor landscaping [gardens, plants, balconies, and terraces]
- Condition of windows and doors [broken or cracked, loose or jammed handles & hinges]
- Last pest inspection check
- Property keys accounted for all locks
- Condition of driveways and sidewalks
- Condition of any external house units [garage, barns, coops, kennels, sheds, etc.]
- Condition of the roof
- Any other special conditions the buyer has negotiated.
After the inspection, if everything looks to be in order and in good condition, the deal can finally move forward and the settlement day can arrive.
If issues are discovered in the final inspection that are not covered in the contract, the buyer must take note of them and mention them to their solicitor or conveyancer.
For any issues discovered in the final inspection, the buyer is entitled to a timely and satisfactory answer from the seller regarding remediation efforts. When an issue cannot be remedied by the settlement date, the buyer can negotiate a better price in compensation for the repairs they undertake later.
This time is critical and exciting for any new home owner and to have a seamless and stress-free buying process, you should consider a real estate service that ensures a professional pre-settlement inspection to guarantee your new home journey is as quick and simple as possible.