Pre-Settlement Inspection Checklist Key Questions to Ask?

The pre-settlement inspection is an essential step in the home buying process.

Typically, you want to exercise your rights as a buyer to do a final inspection about a week before settlement to ensure that since the time you first exchanged contracts, everything is as it should be.

The idea is to make sure that all conditions of the contract have been met, and that the property is in the same state as it was when the contract was signed.

Property Inspection Checklist

Property hunting? This handy inspection checklist will tell you everything you should look out for before buying — from the structural aspects of the property, and its location, to the property’s suitability for finance.

Why is the pre-settlement inspection necessary?

It is essential to physically and thoroughly inspect the property as properties are sold in reasonably the same state as they were when first inspected; unless the contract makes specific provisions.

Once you have inspected the property, if you want changes to be made to the property before settlement or to ensure certain items are included in the sale, you should insert specific terms (or conditions) in the contract.

There may be a new hole in the wall, stained carpets, plumbing issues, rubbish etc., or worse yet, expensive repairs that need to be made since a few months may have passed since the contracts were exchanged.

Note: You’ll have to come up with the cost of any repairs that comes up later if you don’t get the seller/vendor to reduce the purchase price as compensation or have it fixed before settlement.

However, please note that these terms would need to be accepted by the seller.

The final inspection before the settlement is your last chance to ensure all specific terms or conditions have been met or complied with by the seller/ vendor. Make sure to ask these questions when you are house hunting to avoid problems in the future.

Ask for final inspection at least 5 days or a week before the settlement date.

Downloadable pre-settlement inspection checklist

We’ve created a handy ‘Pre-Settlement Inspection Checklist’ that you can download to make the most of your final inspection before settlement.

Download the pre-settlement inspection checklist

Do you really know your property?

You love almost everything about the house you’re purchasing, and are just waiting for a few satisfactory inspections, and the successful conclusion of settlement to move in.

That’s great! However, do you know who has copies of the keys to your new house?

Or where the circuit breaker or the water heater is located?

You realise that you don’t know much yet! Luckily, this can be done simultaneously during the final inspection.

“What things do I need to discuss with the vendor?”

To get situated, e-mail the selling agent with the following list of things that you would like to discuss with the vendor during the final inspection.

15-30 minutes orientation to get to know the house can be really convenient and helpful.

And if it’s an investment property and you’re aren’t able to do this yourself, then you can ask your property manager to do this for you.

Here’s a list of things you need to discuss with the vendor to really get to know your property:

• Getting a professional cleaner in, prior to settlement. This means that when you move in, everything is clean.
• Keys for the property. Best to put them all on a white piece of paper, write the name / where each key is used for and then take a photo.
• Any issues/repairs required to the house that you need to be aware of.
• If you were to make any improvements to the property, what would you do?
• Are there any issues with noise?
• Are there any issues with privacy, e.g. the neighbours can see into the backyard?
• Any issues with termites/borers (note that most houses in Australia have had termites at some stage, in particular, look for any wood touching the ground directly /plants/garden beds that are directly against the walls as this is an easy access point)
• What are the neighbours like?
• If it’s a unit or townhouse, then what is the strata like?
• Any issues with crime/break-ins in the area? Is it safe at night?
• Appliances such as dishwasher/air conditioning/fountains etc – how to use them and copy of any manuals/warranties. If they haven’t kept the manuals, then you can just search online for the model number and usually, you can find them.
• Do you have copies of architectural plans for the property?
• The fuse box (circuit breakers, electricity meter) & water heater location.
• The forwarding address for any of the previous owners’ mail(s) received in the future. It happens more often than you think.
• Garden – anything we need to do to keep it maintained e.g. trimming a hedge.
• Any regular jobs that need to be done to keep the property maintained, e.g. cleaning the gutters.
• Paint colour & type / do they have leftover paint cans.
• Arrange a time for a final inspection prior to settlement (discuss with your conveyancer as well).
• Finally, when you move in consider having a locksmith change all the locks. You purchase a property and have no idea who has copies of the keys. Some real estate agents do provide this is as a service to new owners.

These will help you acclimatise to your new home and get your bearings.

However, there are some essential inspections that need to be carried out first, which are listed below.

Furniture for your property

If you like any of their furniture / potted plants etc. then you can ask them if they are willing to sell these to you instead of moving them to their new house.

In particular, look for unique pieces of furniture that fit a particular part of the house as these can be hard to replace, e.g. a grandfather clock, mirrors or anything that was custom designed for the house.

Note that many properties rent furniture when they are sold so it may not actually be the vendor’s furniture. Anything that is mentioned as an inclusion in the contract of sale (e.g. blinds/curtains are often mentioned) or that is connected to the house, e.g. built-in wardrobes are sold with the home already and don’t need to be purchased.

You may want to bring an interior designer or friend who is good with design into the property. This is because ordering furniture can often take weeks or months and so it’s best to place an order for new furniture as soon as possible.

If the property is vacant and the vendor agrees you may ask the vendor if you can get early access to the property to carry out any work such as painting, sanding the floors or repairs. This then means that you don’t have to wait to do these things before you move in.

What inspections do I need to arrange?

Please note that the above questions about ‘getting to know your property’ are in addition to inspections that we strongly recommend that all home purchasers carry out.

Here are the inspections you must arrange before settlement:

Building inspection

A building inspection checks for structural integrity and soundness.

This vital inspection includes checking the:

• foundations;
• load-bearing walls and members;
• outer skin of the building (it could be bricks, stones, timber etc.) Something to consider is fire and noise resistant walls;
• plumbing and electrical wiring;
• kitchen and bathrooms (they can be expensive to fix/update later on)
• and HVAC (A heating, ventilation and air conditioning) systems, among others.

You can also get a downloadable Building Inspection Checklist.

We strongly recommend that home buyers hire one and that they don’t hire the first building inspector with the cheapest rate they come across.

Find a good, certified building inspector and ask them for testimonials and more importantly, ask if they provide guarantees on their reports. Better yet, get recommendations from someone you respect or your mortgage broker.

Generally, you can expect to pay between $300 and $1,000 depending on the inspector, size of your property and its location (regional or metro areas).

Pest inspection

A pest inspection is not as extensive as a building inspection, and some inspectors offer them as a package with building inspection.

It can cost you up to $100-$150.

However, knowing that at one point or the other, most houses in Australia have had termites or borers at some stage, this is money well spent.

You can also get a downloadable Pest Inspection Checklist.

Strata inspection

Even though the seller’s solicitor will provide you with a certificate (under Section 109) which should give you relevant information about insurances, cost of levies, deeds and books – you can also choose to have your own solicitor arrange a pre-purchase strata inspection.

This is optional; however, it is recommended to do so; before contracts are exchanged. Some solicitors/conveyancers may do this as part of their services. Ask them!

Final inspection before settlement

Typically, you want to do a pre-settlement inspection about a week before settlement to ensure that since the time you first exchanged contracts, everything is as it should be.

Download our pre-settlement inspection checklist and use it as a guide to ensure you’re on top of everything.

You’re in the final stretch!

Now, if you’ve done all of the above (due diligence) and are satisfied with the reports, you can breathe easy and begin planning your move.

Here’s our moving house checklist you can follow, to make moving day efficient.

Some extra tips to get you situated in your new home

Here are some additional tips to help you get situated.

• If you have a baby or a toddler, childproof the house. At a minimum, you should childproof the nursery or your toddler’s room and the living room.
• Give the appliances in your new place a twirl. Connect them, use them and see if they’re in working condition.
• Note down the readings of the electricity and water meter, and keep those numbers handy should a dispute of any sort arise.
• Check the doors and windows for locks, and work out if you need to install a security system.
• Check the pest and building inspection reports before deciding to buy the property. Ignoring minor details can cost heavy maintainance cost afterwards.
• Check the storage to ensure everything is cleared out for you to move in your stuff.
• Ensure that you have house insurance starting from the settlement day.

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Have any questions regarding your new property or your home loan? We’re here to help!

To speak with one of our award-winning mortgage brokers, please give us a call on 1300 889 743 or fill in our online assessment form.