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Pre-settlement inspection: the five checks nobody does

The pre-settlement inspection is your last chance to verify that the property you are buying matches what you agreed to buy. It happens in the last 5-7 days before settlement, and most buyers do it as a drive-by. Five specific checks are worth the extra hour.

Check 1: Inclusions match the contract

The contract’s inclusions list - dishwasher, curtains, TV bracket, garden shed, pool cleaner - is a legal schedule. Vendors occasionally remove items they decided weren’t included. Walk through with the contract and tick each item.

Check 2: All agreed repairs are complete

If the vendor agreed to repair a specific defect (loose balustrade, broken flyscreen, leaking tap) as part of negotiations, verify the repair is done and done properly. A signed agreement to repair without verification leaves you with a settlement-day argument.

Check 3: No new damage since contract

Damage that occurred after contract signing is usually the vendor’s responsibility to repair or compensate. Check: walls (holes from removed hanging racks), floors (scratches from furniture removal), windows (cracks from truck loading), garden (removed trees or plants). Photograph anything new.

Check 4: Services are all operational

Run every tap, flush every toilet, turn on every appliance, test every light switch, check every aircon remote. Report anything that does not work. Some of this is trivial; some of it (a failed hot water system) is a $4k issue that must be resolved at settlement.

Check 5: Property is genuinely vacant

Vendors are usually required to hand over vacant possession. Check:

  • All furniture the vendor intended to take is gone
  • Garage and shed are cleared (common oversight)
  • No tenant still in residence (rare, but occasionally the vendor has been unable to terminate a tenancy and has not notified you)
  • Keys for every lock are provided

What to do if something is wrong

Do not settle. Or rather, do not settle without formally putting the issue to the vendor’s solicitor in writing with a remediation request. The standard options are:

  1. Vendor repairs before settlement (often impossible in 48 hours)
  2. Settlement adjustment - a dollar amount deducted from the purchase price at settlement to cover the cost
  3. Escrow - an amount of the purchase price held by the solicitor until the repair is complete

Your solicitor negotiates this. Your job is to identify the issue clearly and photograph it within the window.

Timing

Arrange the pre-settlement inspection for 3-5 days before settlement, not 24 hours before. That gives time for the solicitor to negotiate if needed. Doing the inspection on the morning of settlement is too late - if a major issue arises, your only option is to delay settlement, which incurs penalty interest.