What Do You Actually Need To Check At A Pre-Settlement Inspection?
In This Week’s How's The Market | Edition 73
What Do You Actually Need To Check At A Pre-Settlement Inspection?
The Final Week Of Listings
An Indoor Lap Pool In Brunswick?
What Do You Actually Need To Check At A Pre-Settlement Inspection?
One of the most common questions I get asked from buyers who have just had an offer accepted on a property is ‘what’s next?’.
Many first-home buyers especially do not even know that they have the right to a pre-settlement inspection also commonly referred to as a final inspection.
So what is it, do I need to do one, and if so, what should I be checking?
All questions will be answered here!
So firstly, what is it?
A pre-settlement inspection is a right awarded to the purchaser of the property and grants access within the week leading up to settlement day to check any special conditions have been met and the property is in the same state and condition as at the date of contract signing.
Most contracts in Victoria will be made with vacant possession, which means that all items will also need to be removed from the property. This is something that can be checked at the final inspection.
I suggest that you complete your final inspection around 5 to 7 days prior to the settlement date, so that if there are any issues, the vendor has enough time to rectify any problems without needed to delay settlement.
Do I need to complete a pre-settlement inspection?
A final inspection is a privilege and not something that is mandatory to be completed. However, I highly suggest that you contact the agent and organise one and a half weeks from settlement and book one in as things can go wrong, and once a property is settled, it’s your problem and there is often very little you can do.
What do I need to check?
Luckily for you we have put together a free checklist that you can download below to help you at your pre-settlement inspection.
Pre-Settlement Inspection Checklist - DOWNLOAD
However, there are some additional things you need to keep an eye out for including:
Damage - make sure there is no new damage to the property that has occurred after you have made your offer on the property. A common example could be that the vendor or tenant has damaged a wall whilst removing their furniture. They could also have pictures, paintings or fixed items on the wall that they have removed whilst vacating the property that has left holes in the walls.
Please keep in mind that fair wear and tear is not classed as damage. You should discuss any items you are concerned about with your conveyancer for their advice.
Items or rubbish - if your offer has been made with vacant possession at settlement, it’s important to make sure that the property is actually vacant. Check all draws, cupboards and even the attic to make sure no rubbish or items have been left behind.
Appliances are working - test all lights, heating, cooling, gas, hot water systems, doors, locks and other electrical items are in working order. If these items are not working, you do need to be able to prove they were working when you inspected the property or show that they were advertised in the listing. This is why its important to take videos whilst at the inspections.
What if something is damaged or wrong?
Do not panic! It’s common for things to not be working or for there to be minor damage prior to settlement. You should take photos of anything that is not working, damage or rubbish and send it to your conveyancer straight away and also explain to them or send them evidence that the items were working or not damaged when the offer was made.
Your conveyancer will take over from here and will contact the other party to get them to either fix the issue prior to settlement or funds will be deducted from the settlement.
What The Agents Are Saying
The final week of stock!
For most agents, this will be the final week they list stock and December 16th will be the last auction date of the year.
Most agents now are trying to build their pipelines for early next year and you will start to see the difference between the top agents and average agents become more apparent as average agents are already starting to wind down and go on holidays, whilst the top agents will likely work right through and be signing up properties right until Christmas day.
I spoke to an agent earlier today who said that he is planning to list properties right through December with January auction dates as very few other agents do this, so you will see some stock from these agents over the next few weeks.
The Wow Factor!
767 Park Street, Brunswick, Vic 3056
Have you ever heard of a 292m2 terrace property in Brunswick that has an indoor lap pool?
This is an epic example of a Wow Factor as there is something so completely out of the ordinary with this property that none of its neighbours would have.
The rest of the property looks fairly average, and yet still, it has a price of…
Price Guide: $4,200,000
In The Media
'Unaffordable': One in 10 Australian children move back in with parents
Unfortunately, this doesn’t surprise me.
A Finder survey of 1073 people found 10 per cent of Australians have either moved back home with their parents or had a child return home in the past year.
Of those moving back, almost a third (30 per cent) did so because their rent was "unaffordable".
Another 30 per cent did so to save for a house deposit.
This is the reality of what it is going to be like for many young people as saving up for a house deposit is becoming increasingly difficult as their borrowing capacity has been reduced from rising interest rates.
Many of my friends are also looking to either move back in with their parents or find housemates to cope with the rising rental costs.
Final Thoughts
Getting to the pre-settlement inspection is an exciting step to purchasing your new home.
Though whilst you are close to settlement, this doesn’t mean that you are there and there is still work to do before you can invite family and friends over for a glass of champagne.
Make sure to organise your final inspection for roughly 7 days before settlement and bring along our checklist to make sure everything is in order.
Best of luck.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
