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Pre-settlement inspection checklist

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Everything you need to cover during pre-settlement inspections

A pre-settlement inspection gives you a critical chance to inspect your new home before settlement. It’s a final inspection of a property by the buyer, typically with the real estate agent present as witness, before taking ownership. The goal of a PSI is to identify any potential problems or damage that have arisen since purchasing the property.

PSIs are not required by law, but they are generally considered a wise investment, particularly for older homes or properties that have been occupied during the settlement period. Settlement periods can be up to 120 days, therefore the condition of the property may very well have changed in this time. Generally pre-settlement inspections are carried out anywhere from 3 days to 1 week before taking the keys to the property – you want to ensure that you leave enough time to request from the vendor that any repairs (or other maintenance items) are made if they are found during the inspection.

Examples of damage might be new holes in the wall, carpet stains or the pool growing mould!

As important as a pre-inspection checklist is, there are other steps you need to undertake before the settlement date. Complete Conveyancing Solutions offer Victorian buyers a complete range of conveyancing services to ensure that they are protected in the week leading up to settlement day. To get started, we offer free, no-obligation contract reviews.

Why do I need a pre-settlement inspection?

A pre-settlement inspection can save you a lot of money and headaches down the road by helping you to identify any potential problems with the property before you take the keys. The main reason for carrying out a pre-settlement inspection is to ensure the property is in the same condition as when you bought it. Once you own the property, you will be responsible for any repairs or damage that may exist, and can no longer request the vendor for assistance. If there is damage, or a repair issue that was present during time of purchase, then you will be unable to request the repair of this during the pre-settlement period. However if new issues have arisen in the time between purchase and your pre-settlement inspection, then they may be raised with the vendor.

What does a pre-settlement inspection cover?

While the pre-settlement inspection ensures that nothing has changed since the initial inspection, it’s important to understand exactly what to cover during a pre-inspection.

A typical pre-inspection will cover all major systems and components of the property, including the foundation, framing, electrical system, plumbing, HVAC system, and more. Look for any signs of pests or other damage that may have arisen since purchase. In short, the property needs to be in the same state it was when the property was purchased.

Here’s a full pre-inspection checklist for you, and potentially a witness such as your real estate agent to cover:

  • Lights and electronics – test all light switches and power points plus mounted electronics like CCTV, in-built speakers, and alarms.
  • Plumbing – every tap needs to be working and each drain needs to be running freely if not damaged.
  • Water heaters – run the hot water in every hot tap to test the hot water system.
  • Heating and cooling – check all heating and cooling, including air conditioners. Be sure there’s a remote if necessary.
  • Doors – turn door handles and make sure every door closes. Ensure that doors and windows also lock if necessary.
  • Appliances – all appliances that come attached to the house are part of the sale. Test all stoves and dishwashers.
  • Shading – lose all blinds and curtains to ensure that they are operating correctly.
  • Windows and glass – make sure all glass is undamaged and that the windows lock correctly.
  • Flooring – make sure all the flooring is intact and undamaged, including tiles.
  • Pools – pools and spas count as fixed items and need to be working correctly, including the pool pump.
  • Pests and cleanliness – the home needs to be in a liveable condition, and free from pests
  • Smoke detectors – the smoke alarm system is a big ticket item. All smoke alarms need to be working.

Items such as the above should have been investigated and made a record of pre-purchase. What you’re looking for here is that they are all consistent with that record.

If your conveyance has negotiated special conditions, then these need to be met. These might include inspections of the exterior of the property, soil inspections, removal of certain items, and ending tenancy agreements. If you want to learn more about special conditions, then get in touch with our team.

pre-settlement inspection 2

What do I do if I find problems?

If the inspection reveals any problems with the property that were not there during the purchase date (contract of sale signing), you will need to decide how to proceed. Raise the issue/s with your conveyancer, who will then negotiate with the seller to have them make repairs before finalising the settlement.

It is important to keep in mind that a pre-settlement inspection is not a guarantee that no problems will exist with the property after you take ownership. However, it is a valuable tool that can help you to identify and address potential issues before they become your responsibility.

What do I need to bring to the inspection?

When you schedule an inspection, you should bring the following; the contract of sale, to ensure that everything is in-line with what you have signed off on; any photos, videos or notes that you recorded of the property’s condition or functionality from your pre-purchase inspection; and a camera to make note of any new issues.

How long does the pre-settlement inspection take?

A pre-settlement inspection will typically take 30 minutes to 2 hours – this varies greatly depending on the size and age of the property. If there are no apparent issues then you may find it is much quicker, however on the contrary if many issues are found then you may decide to spend more time making detailed notes of these.

How much does it cost?

There is no cost of a pre-settlement inspection, as you will carry out the inspection yourself, likely with your real estate agent. Before the purchase date (link to pre-purchase inspection article), and contract of sale is signed, buyers are recommended to hire a professional to carry out a building inspection, which can cost anywhere in the vicinity of $200 – $500.

What happens after the inspection?

After a successful inspection, the buyer will usually proceed with finalising the settlement of the property. In some cases, the buyer and seller may negotiate who will pay for any repairs that need to be made before closing. Once all repairs have been made and the buyer is satisfied, the settlement will take place, and the keys will be handed over.

We strongly advise booking a pre-inspection of your property. It is essentially your final chance to discover if there are any critical problems with the home that will need necessary repairs before settlement. A new house can undergo significant damage in just a few months, especially if it holds tenants.

An inspection will reveal any hidden problems before you reach the finish line.

How we can help

Having a conveyancer in your corner is essential for success in the period leading up to settlement. While we can’t fix your air conditioning, we can help you get the most out of your contract.

As stated previously, as conveyancers, we can outline any special conditions that need to be met before settlement takes place. We can ensure that the state of your home can include improvements to the exterior of the property including sheds and garages. From soil testing to ending tenancy agreements, we can take care of all of your needs.

We also offer a range of other conveyancing services that we can personalise depending on your situation. To learn more about our services, we can get started with a free contract review session. This is a no-obligation meeting where we will give you free advice, and you can decide whether you want to engage us as your conveyancer. Let’s get started.

Maria Tomlinson holds an unrestricted conveyancing licence together with Professional Indemnity Insurance against civil liability. Maria Tomlinson commenced her career in Conveyancing in 2001. She furthered her studying by completing her Diploma in Conveyancing in 2017 which has led her to hold an unrestricted Conveyancing License and successfully open her conveyancing firm, Complete Conveyancing Solutions.

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