What to expect in a final inspection presettlement

Congrats, you’ve sold! All that stands between now and settlement day is… final inspection. But what’s the purpose of a final inspection and should you be concerned as vendor?

Most final inspections happen anytime from a week up to a few hours presettlement. They’re not compulsory, but buyers usually want to use the opportunity to check nothing ‘untoward’ has happened to the property since they signed the contract. Buyers are entitled to receive a property in the condition it was presented to them. How many inspections a buyer is entitled to is set by your contract of sale and varies between states. Standard contracts typically allow one pre-settlement inspection, though a buyer can ask for another if they identify any problems. It’s not unusual for a buyer to bring one or two other people along with them, but if they rock up with their entire extended family, you probably have a valid case to object. Some standard contracts limit how many people can accompany the buyer, so check yours. Either way, it’s reasonable to expect a small group rather than an entourage.

What are buyers looking for during a final inspection?

Most of the time, buyers just want to get a better feel for their new home. Maybe they need to measure spaces so they can plan what new furniture to buy or where to position their existing furniture. They may have furniture that doesn’t fit which they’ll need to get rid of. The more finicky buyers, however, will be a little fussier testing electrical sockets, garage doors, heating etc. Common things they have a right to check for include –

• Are all appliances still in working order?
• Is there any deterioration or damage to the property since signing the contract?
• Are items included in the contract missing like fixtures, appliances and furniture that may have been negotiated as part of the sale? (A little tip: loose items, known as chattels, such as freestanding appliances and play equipment, generally don’t have to be left unless the contract includes them, whereas fixtures attached to the house usually do. If something is borderline, such as a dishwasher, the safest course is to spell it out in the contract.)
• Have the agreed repairs been carried out?
• Has rubbish been left on the property that could prevent them taking vacant possession?

If the new owner claims to find damage or deterioration, it doesn’t necessarily give them the right to withhold on settlement. They have to firstly prove the damage breaches the conditions stated in the contract of sale. And deterioration could be the result of fair wear and tear or may have existed before they signed the contract – they just failed to see it. If, however, there’s substantial new damage, you may be in breach of the contract. What the buyer can then require, whether repairs before settlement, an adjustment to the price, or in serious cases something more, depends on the terms of your contract and the law in your state.

If a problem emerges from the final inspection…

Occasionally, disputes do arise as a result of a final inspection. If this happens, try and work out an agreeable compromise with your buyer – it works in both your interests if you can resolve things amicably. If an agreement can’t be met, you may want to seek legal advice.

Disclaimer: This article is general information only and is intended as educational material. PropertyNow nor its associated or related entities, directors, officers, or employees intend this material to be taken as advice either actual or implied. You shouldn’t act on any of the above without seeking qualified advice, which takes your individual circumstances into account.