Definition
A Final Inspection, also known as a Pre-Settlement Inspection, is the buyer’s last opportunity to inspect a property shortly before settlement to confirm that it is in the same condition as when the contract was agreed. This inspection allows the buyer to ensure that the property has not been damaged, that agreed inclusions remain in place, and that any negotiated repairs have been completed.
In New South Wales property transactions, the final inspection typically occurs in the days leading up to settlement and is arranged through the selling agent. It is not intended to be a full building inspection but rather a confirmation that the property’s condition and contract terms have been maintained since the exchange of contracts.
Where Final Inspections Apply
Final inspections are commonly conducted in residential property transactions across New South Wales before ownership of the property officially transfers.
Typical situations where final inspections occur include:
Residential Property Purchases
Home buyers usually conduct a final inspection shortly before settlement to ensure the property has been maintained as agreed.
Private Treaty Sales
In negotiated property sales, buyers arrange a pre-settlement inspection through the real estate agent before settlement day.
Auction Purchases
Even when properties are bought at auction, buyers generally conduct a final inspection before settlement to confirm the property's condition.
Vacant Possession Agreements
If the contract states the property must be vacant at settlement, the buyer may confirm this during the final inspection.
What Buyers Check During the Inspection
The final inspection is mainly used to confirm that the property matches the contractual expectations and that nothing significant has changed since exchange.
Buyers commonly check:
Property Condition
The property should be in substantially the same condition as when the buyer agreed to purchase it.
Inclusions and Fixtures
Items listed in the contract—such as appliances, light fittings, or built-in furniture—should still be present.
Agreed Repairs
If the seller agreed to complete repairs as part of the contract, the buyer can confirm that the work has been completed.
Property Damage
Buyers may check for any damage that may have occurred after exchange of contracts, such as water leaks or structural issues.
Timing of the Final Inspection
The pre-settlement inspection usually takes place within 24 to 72 hours before settlement, although the exact timing may vary depending on the circumstances of the transaction.
Buyers often coordinate the inspection through the real estate agent once the settlement date approaches. In some cases, buyers may conduct more than one inspection if settlement has been delayed.
What Happens If Issues Are Found
If a problem is discovered during the final inspection, the buyer’s solicitor or conveyancer may raise the issue with the seller’s legal representative before settlement occurs.
Possible outcomes may include:
- The seller agreeing to fix the issue before settlement
- Negotiating a financial adjustment to account for the problem
- Delaying settlement until the issue is resolved
The final inspection provides buyers with an important opportunity to confirm that the property is ready to transfer according to the agreed terms of the Contract for Sale.