As well as having building and pest inspections, did you know you’re entitled to a final inspection of the property you are buying before you take possession of it?
Known as a pre-settlement inspection, this inspection is your chance to check all fixtures and fittings are working and to confirm all the contractual requirements and specifications have been met before you sign on the dotted line and hand over the money.
Once settlement takes place it is extremely difficult to make the previous owner responsible for repairs and to return items that you had thought were going to be included.
For an investor, the pre-settlement inspection is all the more important as ideally, you want the property at the highest standard when you take possession of it so you can get it tenanted as soon as possible.
If you are having to make repairs once you own the property, not only are there likely to be costs associated with the repairs, (for instance, fixing a faulty electrical socket can cost around $100), but it may mean your property will not be tenanted, so you will lose on the rent too.
When to have a pre-settlement inspection
The pre-settlement inspection should be timed to be as close to the time of settlement as possible. By being close to the time of settlement, there is less time for things to go wrong and there is still time for the problem to be sorted.
Ideally the property will have been vacated, or at least be relatively clear of belongings making it easier for you to spot anything you’d like fixed before you sign.
What to check
To give you some idea of what to look for, items to check at in the pre-settlement inspection include:
- light switches, electric and gas hotplates and ovens
- air conditioning and heating
- power points – some people take a hair dryer with them to check these
- cupboards open and close properly
- all locks work
- does the dishwasher work
- remote controls for garage doors and security gates are there and work
- run water to check tap pressure and for any leakages
- make sure the TV antenna/satellite dish are still there and working
- if the property has a pool, make sure the pump and associated equipment is working
What else to ask
Before this inspection, you will hopefully already have a history of the property and any previous issues however now is the time to ask about other small aspects, such as manual and warranties for any appliances which are been left.
If there is an alarm, ask if it is owned and or under a monitoring contract and find out where the cut-off valves for water and electrics are (this information should also be conveyed to the tenant when they move in).
What happens if there is a concern?
If you do have a concern, the current owner may choose to rectify it, or may be open to negotiating a reduction in the final price. You are also able to re-inspect the property again before settlement takes place to ensure the work has been carried out.
If you would like to know more about pre-settlement inspections or more about investing in property in the Newcastle region, our knowledgeable and experienced team would love to help. With over 40 years of business in the area, we are one of Newcastle’s longest established real estate offices, so give us a call on 02 4954 8833 or pop into our Cardiff office for a chat.