Your Pre-Settlement Inspection: What to Check Before You Get the Keys
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Before the settlement day of your new house, it’s a good idea to check the property is in the same state as when you signed the contract. Our pre-settlement inspection checklist could help you with the process and will hopefully give you a smooth settlement.
The pre-settlement inspection is your opportunity to do a final walkthrough and inspect the property before the property officially becomes yours.
Don’t forget to check for any significant damage that has happened during the settlement period – and request to get this repaired by the seller before you settle. Take a checklist with you to help make sure you don’t miss anything.
From the time you sign the contract of sale for your new home, it can be a period of weeks or even months before your settlement date. During the settlement period, there could be new damage or deterioration to the condition of the property, or there could have been things removed that were part of the sale contract. The final house inspection, also called a pre-settlement inspection, allows you to identify anything that needs to be sorted out before settlement.
The pre-settlement inspection is your chance to:
Once settlement happens, it can be much harder to get things fixed, this step protects you.
Try to arrange your pre-settlement inspection around five working days before settlement. This allows enough time for the vendor to fix any issues that arise from the inspection prior to settlement. You can leave the final inspection up to several hours before settlement. However, if you do find a problem, a few hours doesn’t leave you much time to negotiate or to have issues fixed.
Ideally, you would undertake the final inspection once the owners or tenants have moved out, but this is not always possible. If there are still belongings at the house, you can ask your solicitor to request an assurance from the vendor that all items will be removed prior to settlement. It is best practice to highlight any issues before settlement because once you’ve completed the sale it can be harder to get the vendors to fulfil their obligations. If there’s still a big pile of rubbish in the garden, for instance, you might have to pay to have it removed yourself.
You need to give the vendor a reasonable amount of notice to ensure they are ready for the final inspection. You can ask the real estate agent to arrange a time that suits both parties. If it is a private sale, you could arrange this directly with the vendor.
Normally the purchaser would do the inspection. It’s common to bring the real estate agent as well. Sometimes the purchaser can also hire a pre-settlement inspector.
If you cannot make it, you can:
On the final inspection day, do a walk-through of the property looking for damage that may have occurred since your sale was finalised. You’re also checking that everything is clean and in the same working order that it was when you exchanged contracts. You want to ensure everything included in the contract of sale is still in place.
Key things to look out for – overall conditions.
If you identify something that isn’t as it should be during your house inspection, let your solicitor or conveyancer know. It is the previous owner’s responsibility to remedy any problems before settlement.
Your solicitor may communicate the issue to the vendor’s solicitor and come up with a solution that both parties are happy with. If you’re not happy with the suggested solution, let your solicitor know so you can reach a solution that suits both you and the vendor.
Common solutions include:
If the previous owner does arrange repairs to the property, your solicitor may request that a second pre-settlement inspection takes place to make sure you’re satisfied with the repairs, especially if this was to repair significant damage. This means if they tell you they had a plumber round to repair that leaky tap, you might like to go back and make sure you’re happy with the job that’s been done.
Your pre-settlement inspection is your last opportunity to ensure everything is as agreed before your loan settles. Taking the time to do this properly helps protect your purchase and avoids unexpected costs after you move in.
Anthony Landahl | Managing Director Equilibria Finance
This is for general information purposes only and does not constitute advice. With all of these options there are a number of considerations outside the scope of what is covered in this article that you need to understand to ensure your personal circumstances are taken into consideration.
Equilibria Finance is a mortgage broking practice specialising in delivering residential and commercial mortgage and business and asset finance solutions to the clients of financial advice and accounting practices.
