18 April 2022

Your Complete Pre-Settlement Checklist

Emma McLaren

When buying your home, you go through a whole range of emotions. But when it’s almost time for settlement, it’s easy to get excited and overlook issues that may cause trouble in the months to come.

Having a pre-settlement checklist allows you to keep the excitement while also ensuring that you don’t miss anything that may have changed between the time you entered the contract and settlement. This is important, particularly if someone has been living in the property since you went to contract - the house is potentially going to have issues or damage that wasn’t there when you originally inspected it.

When Should I Do a Pre-Settlement Inspection?

Depending on your state and the conditions of your contract, the settlement period could be anywhere from 30 days to 90 days. If you’re paying cash, it could be less. This is a fair length of time, so ensuring you inspect before settlement is important.

In some states, you can inspect the property at any reasonable time in the week before settlement. In other states, you may have to ensure that your contract says that you are entitled to a pre-settlement inspection.

It is best to do your inspection two to three days prior to settlement, so there is time to make any repairs.

What to Check During a Pre-Settlement Inspection

During this inspection, the main thing you want to check is that the property is in the same (or similar) condition to when you signed the contract. You want to make sure that all rubbish and belongings have been removed from the site and that any repairs or special contract conditions agreed upon have been done.

From time to time, you may discover issues that weren’t there when you purchased or were covered by furniture or other furnishings - holes in the wall, broken windows, leaking pipes, broken appliances, etc. In this instance, you need to speak to your solicitor or conveyancer to either request that the issue is repaired before settlement or a sum of money equivalent to the cost of the repair be taken off the settlement figure.

Who Should Attend the Inspection?

When booking a pre-settlement inspection, you need to organise this at a time that suits the vendor - until that settlement occurs, the house isn’t yours to turn up unannounced. Speak to the real estate agent looking after the sale to organise a time suitable for all parties.

Generally, the selling agent will attend the inspection with you. However, they may send someone else from their office. This person should know enough about the property to confirm whether the damages are new or not.

This is the time to do any final measurements on fridge space, washing machine space and the like, so make sure you have a measuring tape and notepad and pen if you need these figures.

What Should I Inspect?

You should be having a really good look at everything. Slowly move from room to room, looking from top to bottom. Have a notepad and pen ready to make any notes. You may like to have a second person inspect with you taking notes in case you miss anything.

You should take a good look at the following:

  • Lights and electronics - do they work?

  • Plumbing - are there any leaks or any spots in the yard that feel extra spongy or look extra green?

  • Water heaters - is hot water coming out of all taps, including the shower and bathtub?

  • Air conditioners and heaters - are they clean of dust and mould? Do they work? Don’t be afraid to turn these on and check that they work correctly.

  • Are door handles and locks in place, do they work, and are they loose? You may consider changing these anyway, but it is still an area to cover.

  • Appliances - check the oven, cooktop, dishwasher, and other appliances to ensure they work. Turn the oven on all settings, make sure the fan works and the oven heats up. Turn on all elements on the cooktop and ensure they heat up. Ask to run a cycle through the dishwasher to ensure it all works with no leaks.

  • Curtains and blinds - open and close all curtains and blinds to ensure they work. Check for missing blind blades and weights. Ensure these are clean.

  • Windows, glass and doors - check for cracks in any windows or fixed mirrors in the property. Check that all sliding doors open, close and lock correctly. Check that all hinged doors open easily; if they don’t, they may be swollen from the weather.

  • Pool and spa filters - ask the owner to turn any filters on so you can ensure they are working. Ask questions about what kind of filter the property has and when it was last repaired or serviced.

  • Smoke alarms - check all smoke alarms work and that they are the legislated alarms and in the legislated position within the house.

  • Check for signs of pests - this one is a little harder, but check the walls and skirting boards for any damage and droppings.

Along with your notepad and pen, bring along a copy of your contract to ensure that any chattels that were to remain with the property have been left and that anything else that doesn’t belong to the property (fridge, freezer etc.) has been removed.

You should also make sure that the property is, in general, clean and tidy and that any special conditions in the contract have been met.

What Happens if There is an Issue?

There are a couple of things you can do if you find damage or something that hasn’t been removed from the property. Firstly, you should raise all issues with your conveyancer or solicitor immediately. Take photos for proof. Your conveyancer will then attempt to negotiate for the repairs to be done before settlement or if they cannot be done in time, for an amount to be taken off the sale price to cover the cost of repairs.

It is also wise to consider whether you would make any changes to the property anyway. If you were going to do a full kitchen reno, it might not concern you if one hotplate isn’t working. You may have been replacing the floors, so a tear in the carpet isn’t an issue. Be clear to yourself about what does and doesn’t matter to you as the buyer.

Understandably, you are excited about moving into your new home. Still, by staying level-headed and having a clear mind while conducting the pre-inspection survey, you’ll be well prepared should any issues arise.

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