Imagine you went to an open home and found your dream house. You went back the next day, inspected the property thoroughly and signed the contract of sale. Because you read our
Before You Buy Guide, you were well prepared. Congratulations!
What next?
One of the steps leading up to settlement is attending a pre-settlement inspection. Pre-settlement inspections are conducted, as the name suggests, just before settlement. These inspections are held for the benefit of the purchaser.
Under a contract of sale, purchasers have the right to ensure the property purchased is in the same condition it was in when they first signed the contract of sale. This is important because a significant amount of time could pass between signing and the day of settlement. It is not uncommon for 30-60 days, sometimes more, to pass.
How do I organise one?
If the real estate agent has not reached out to you to organise an appointment time, contact the agent roughly 2 weeks before settlement to ensure you find a time to inspect the property. Pre-settlement inspections are conducted the week before settlement.
This is your opportunity to inspect every nook and cranny of the house so make sure you leave enough time to check that everything is in working order.
What am I looking for?
In addition to ensuring the property is in the same condition it was in when you signed the contract of sale, you should check for any signs of major damage. If you obtained a building and pest inspection you should check that any items mentioned in these reports have not worsened. If you did not get a chance to conduct a thorough inspection before signing the contract of sale, make sure you do so at the pre-settlement inspection.
If the vendor promised to include any chattels with the property and this was included in the contract of sale, you should check to ensure these items are also in good condition.
To assist you at your pre-settlement inspection, we have prepared a checklist. You can print out our Pre-Settlement Inspection Checklist and bring it with you, along with the contract of sale, to the inspection.
What if there is major damage?
Oh no! The vendor’s teenage son had a crazy party the night before the inspection. You attend the inspection to find the house is completely trashed and there is a hole in one of the walls. What do you do?
If there is a major issue with the property, you may be able to terminate the contract of sale. For minor issues, you may be able to negotiate a reduction in the purchase price or request a repair prior to settlement. Whether a breach of the contract of sale is significant enough to entitle you to termination is a complex legal question and we recommend you contact us if you discover any issues. More often than not we find the only issues that arise at pre-settlement inspections can easily be rectified by the vendor prior to settlement (cleaning the AC ducts, for example)
Pre-Settlement Inspection Checklist
For more information on how the entire conveyancing process works, or to obtain a copy of our Guide to Purchasing a Property,
contact us.
