Pre Settlement Inspection & Settlement Day

[EstatePreneur]

I'm about to move in to my PPOR, settlement date is 28 September next Friday.

I contacted the RE agent to arrange pre-settlement inspection to be held this Saturday afternoon due to my full time job (I can't inspect during weekdays I told her).

The RE agent came back to me saying the owner insists the pre-settlement inspection to be done the day before the settlement day which is next Thursday (27 September) at 1PM or 5PM, which is not possible for me due to work.

Should I insist to inspect this Saturday or is it okay to go with what the owner wants, do the inspection on next Thursday?

I heard from my friend, he said pre-settlement inspection better be done at least 1 week before the settlement day, so that if there's some issues with the property, we can report this to our solicitor and take some action (i.e. renegotiate/reduce the purchase price).

I have to get back to the agent in the next hour or so.
So all the wise/experienced men on this forums, please give me some wise advice

 

[Debt Junkie]

My last pre-settlement inspection was done on the day of settlement. (Inspection at 1 pm, settlement at 3:15pm ...)

I'd have preferred a bit more time in advance, too. BUT, advice from a friend who had worked in a conveyancing firm for many years suggested that an inspection on the day of settlement was common and a good idea. He advised that on many occasions the pre-settlement inspection showed up interesting problems - little things, like missing hot water systems etc ... who would have thought it?

If a seller is going to do something like this, okaying the purchase a week in advance of settlement just gives them more time to take away items - so maybe it's not such a bad idea.

Sorry for throwing a negative like this into the forum ...

DJ

 

[ozi]

I'm about to move in to my PPOR, settlement date is 28 September next Friday.

I contacted the RE agent to arrange pre-settlement inspection to be held this Saturday afternoon due to my full time job (I can't inspect during weekdays I told her).

The RE agent came back to me saying the owner insists the pre-settlement inspection to be done the day before the settlement day which is next Thursday (27 September) at 1PM or 5PM, which is not possible for me due to work.

Should I insist to inspect this Saturday or is it okay to go with what the owner wants, do the inspection on next Thursday?

I heard from my friend, he said pre-settlement inspection better be done at least 1 week before the settlement day, so that if there's some issues with the property, we can report this to our solicitor and take some action (i.e. renegotiate/reduce the purchase price).

I have to get back to the agent in the next hour or so.
So all the wise/experienced men on this forums, please give me some wise advice

Your friend has given you some wise advice. Although I think 2-3 days prior is sufficient. I wouldn't do it the day before, because as you have stated if there are issues you have no time to sort them out.

Regards,
Ozi

 

[EstatePreneur]

Thanks for the advice Ozi.

I just talked to the RE agent, the seller still insists to have the final inspection done by Thursday which is the day before the Settlement day.

I'm getting suspicious the seller might be hiding some issues of the property from me. When I had my building/pest inspection done about 1,5 months ago, we found some plumbing issues in the bathroom which caused some damage to the exterior walls near the bathroom. And the seller has agreed to $1500 price reduction.

Hmm, I think I'd better discuss this with my solicitor tomorrow.

 

[Harris]

I heard from my friend, he said pre-settlement inspection better be done at least 1 week before the settlement day, so that if there's some issues with the property, we can report this to our solicitor and take some action (i.e. renegotiate/reduce the purchase price).

Not sure about QLD however this wouldnt work in Victoria. You cannot re-negotiate the price once contract is unconditional and especially being so close to settlement.... even if the property has issues - Unless they have demolished the kitchen or a wall - something very major in nature.

Something that you notice after the unconditional contract (like damp, rubbish in the house, cracks in the walls, termites etc etc) cant get you out of your legal obligation to complete the settlement.

Harris

 

[EstatePreneur]

Not sure about QLD however this wouldnt work in Victoria. You cannot re-negotiate the price once contract is unconditional and especially being so close to settlement.... even if the property has issues - Unless they have demolished the kitchen or a wall - something very major in nature.

Something that you notice after the unconditional contract (like damp, rubbish in the house, cracks in the walls, termites etc etc) cant get you to out of your legal obligation to complete the settlement.

Harris

Thanks for your reply Harris.
So that pretty much shows that the pre-settlement inspection isn't that useful if I can't renegotiate or perhaps get price reduction due to some issues with the property.

By the way, what would people usually be doing / should I be looking at at the pre-settlement inspection?
I mean is this just a formal visit to the property to show to the owner and RE agent that we're careful buyer or something like that?

 

[marg4000]

The pre settlement inspection is basically to ensure that the house is still in the condition in which it was purchased. About 20 years ago people we know were about to settle on a house when they received a phone call from neighbours who fortunately knew them. Apparently the vendor was in the process of removing the kitchen!!
So you are simply checking to ensure that all fittings are still in place and that the house is in the same condition it was in when the contract was signed. Any discrepancies would be a matter for your solicitor.
Marg

 

[beachgurl]

We usually do a pre-settlement inspection about a day or so before settlement just to make sure there is no rubbish left in the premises or that things have not been taken that need to stay. When we bought our PPOR last year, the vendor was being difficult about being available for an inspection. She eventually agreed to meet us 3 hours before settlement.

The vendor turned up late and arrived via the bus. When we inspected the property we found that the place hadn't been cleaned and there were garbage bags full of rubbish everywhere and things had been hidden in the cupboards in the hope we didn't notice. When we went outside on the balcony we found that they had thrown even more rubbish in the 10mtr-long planter box, including an old skateboard and paint tins. When we asked her to clean it up she said she couldn't as she turned up on the bus as she didn't think she would need to turn up in her car or take anything with her. We ended up watching her for 2 hours while she emptied out the unit and threw everything in a pile at the back door of the car park.

We also made sure the inspection was close to the deadline as her agent told us she was taking the stove, clothes dryer, dishwasher and pulling the air con out of the wall and taking that as well.

So I would agree with the others and make your appointment close to settlement time.

 

[EstatePreneur]

We usually do a pre-settlement inspection about a day or so before settlement just to make sure there is no rubbish left in the premises or that things have not been taken that need to stay. When we bought our PPOR last year, the vendor was being difficult about being available for an inspection. She eventually agreed to meet us 3 hours before settlement.

The vendor turned up late and arrived via the bus. When we inspected the property we found that the place hadn't been cleaned and there were garbage bags full of rubbish everywhere and things had been hidden in the cupboards in the hope we didn't notice. When we went outside on the balcony we found that they had thrown even more rubbish in the 10mtr-long planter box, including an old skateboard and paint tins. When we asked her to clean it up she said she couldn't as she turned up on the bus as she didn't think she would need to turn up in her car or take anything with her. We ended up watching her for 2 hours while she emptied out the unit and threw everything in a pile at the back door of the car park.

We also made sure the inspection was close to the deadline as her agent told us she was taking the stove, clothes dryer, dishwasher and pulling the air con out of the wall and taking that as well.

So I would agree with the others and make your appointment close to settlement time.

Thanks Marg, and Beachgurl.
So inspection on the day before the settlement day is fine afterall

 

[WinstonWolfe]

The vendor cannot dictate to you when you do the pre settlement inspection. It is called a pre settlement inspection, which means you should do it pre-settlement, as in just before settlement.

If I had my way, I would arrange to do settlement at the house, and inspect at the same time. A vendor who has nothing to hide shouldn't care.

A vendor that is demanding you do the pre-settlement inspection several days before has no valid reason for this. The inspection is there to protect your rights, not as a convenience for him. What's to stop him messing with stuff after your pre settlement inspection? Don't give him the time to do that.

Some of the things I have seen vendors mess with after signing a contract:
- exchanging the original oven for a crappier one and not even wiring it up properly.
- leaving sump oil spilled over the garage floor
- not leaving the landscaping in a well cared for manner.
- pulling out air con units and damaging the windows and security screens
- garage door remotes not working or only one provided.
- house not left clean (to the standard expected of a tenant)
- walls and stairwells damaged when furniture removed.
- holes in walls hidden from initial inspection view, by strategically placed furniture
- broken HWS

the list I am sure is endless.
That's why I believe in taking lots of photos or a video of the house, and checkig everythign that is a major expense to replace/fix.

Go through every room. open and shut doors, look behind furniture, take close ups of major fixtures, fittings, and appliances.

Buying a property is the only transaction where you agree to buy something, then let the other person keep it for a couple of months. You wouldn't do that with a car or any other material object.

 

[s_t]

As others have said, I thought the purpose of such an inspection was to check that everything was there and in order just prior to you taking ownership. Why you'd do it a week earlier I'm not sure - you'd have no idea of the condition of the property you are transacting!!

Doesn't always quite work out though At my IP settlement was 2pm in arvo and we turned up at 9.30 to do inspection (with agent), but they had just started moving out!!! Bit hard to do in that instance. They offered that we could come back later, but given she was a nice formal type elderly lady (and didn't have much stuff to move), and had nice friends helping her we didn't think there would be any issues (and there weren't).

WinstonWolfe, I don't think it has to be left in the same condition as that expected from a tenant. As clean as during purchase/inspection is what I understand. Agent told me that the most common problem is they take all the lightbulbs.

 

[WinstonWolfe]

A
WinstonWolfe, I don't think it has to be left in the same condition as that expected from a tenant. As clean as during purchase/inspection is what I understand. Agent told me that the most common problem is they take all the lightbulbs.

If the house was tenanted, the previous tenant would have incurred the cost of bringing it up to a reasonable standard.

If the owner has gone in and messed it up afterwards, then that is atrocious behaviour. As for the place being in the same condition as when first inspected, that is difficult if the place was furnished when inspected with toys and stuff all over the place, but then vacant with hidden holes in the walls and stuff spilt all over dirty carpets. Unless one had photographic evidence, it would be difficult to say what state the house was in at first inspection when furniture and general mess confused the issue.

 

[s_t]

I was thinking owner occupied when writing that. And yes, it would be hard to determine condition so I think there might have to be a bit of give-n-take on either party (I imagine there has been some fights/legal expenses over that!).

If the place is/was tenanted, then yeah, I'd agree with you.

 

[sydneyguy]

I am actually settling next Tuesday as well. (supposed to be this Friday, but vendor chose to do it after the long weekend)

Arranged with the agent to inspect this Friday initially, but later she called to say that the house will get professionally cleaned on the Friday, so she suggested we do it on Tuesday morning and I agreed.

My point (or a question) is that since the contract states (to the effect of) whatever you saw before you bought it is what you get when you settle.

i.e. if there's a damp behind the furniture that you didn't see before, it's your own fault.

is that right?

 

[tubs]

The RE Agent I got out last place from told us they'd heard of dishwashers being removed, so has made sure this is placed in the contract of sale.

Can't imagine a whole kitchen being taken. Now I'm getting paranoid.

 

[Aimjoy]

My point (or a question) is that since the contract states (to the effect of) whatever you saw before you bought it is what you get when you settle. i.e. if there's a damp behind the furniture that you didn't see before, it's your own fault. is that right?

Pretty much correct - that's why you get a building & pest report done prior ro exchange of contracts - so you know what you're getting.
The reason you do a pre-settlement inspection is to see if anything is materially different.

Many moons ago I was a REA and a vendor had removed all the fixed bookshelves prior to settlement. Problem was that the were kinda load bearing bookshelves that were part of the wall and gyprock was missing. The thing went to court with many many delays but vendor had to "make good" on the property before being paid for it.

Aimy

 

[Gremlin]

I'd be of the opinion that you want the pre-settlement inspection to be as close to settlement as possible (bearing in mind that it may raise issues which lead to the delay of settlement). Ideally you want it done on a vacant property. Agree with the suggestion that if you can have settlement on site with pre-settlement prior it's ideal - if there are any issues the pressure's immediately on the other party.

Had one property where the pre-settlement was done a day before and the lightbulbs, the wire from the clothesline (why?!?!?), batteries from smoke alarms/doorbell, oven racks and dishwasher racks were removed in the interim - okay, not a huge loss in the scheme of things (they could've taken the whole dishwasher or oven), but the less time there is to flog stuff the better.

PS Do you know how hard it is to track down and buy a new dishwasher rack?

 

[MishMash]

My partner and I have purchased a house which settles on November 2nd. I will be doing the pre-settlement inspection on the morning of the 2nd. I want to do it as close to settlement as possible.

 

[Glucose]

Had one property where the pre-settlement was done a day before and the lightbulbs, the wire from the clothesline (why?!?!?), batteries from smoke alarms/doorbell, oven racks and dishwasher racks were removed in the interim - okay, not a huge loss in the scheme of things (they could've taken the whole dishwasher or oven), but the less time there is to flog stuff the better.

PS Do you know how hard it is to track down and buy a new dishwasher rack?

Oven racks from a particular brand of stove are not too easy to find either! When we bought our PPOR (many years ago, no pre-settlement inspection) we found on moving in that the TV antenna plug in the wall had been removed, as well as what had been fixed shelves in the garage, and a huge fixed bar in the rumpus room had been removed, leaving holes in the tiled floor!
So yes, an inspection as close to settlement time as possible is a very good idea!

 

[sydneyguy]

Hi, Guys: quick Question.

My settlement is this afvo. I just went through the final inspection. Everything is in order, i.e. all inclusions are there, except 1, There's a drill hole on the wall near the entrance because there was used to be a mirror hanging there and it was not plastered over. 2, the lawn wasn't mown (although apparently the house itself was cleaned)

What do you think of this? Any reason for delaying the settlement?