Final inspections

The final inspection is a buyer’s opportunity to check that the property is in the same condition that it was on the day of sale before it is too late for them to have any recourse.

Sometimes final inspections are also an opportunity for a buyer to ensure that the vendor has completed a task that they were contractually obliged to do, for example; the installation of an appliance or trade efforts that were promised.

When things go to plan, final inspections are great. And sometimes the vendors are keen to meet the purchasers so that they can hand over their home with some well-wishes, instructions, hints/tips and a friendly handshake. 

It’s when things don’t go to plan, however when buyers get stressed.

The way that we deal with these issues, and the ways that our contracts provision for us to deal with these issues can make the difference between a good handover and a stressful one.

We may have the best of intentions to avoid upset with the agent or the vendor, but if something isn’t right on the day of the final inspection, resolution is far easier when we can fall back on a contract that actually provisions for taking fair and reasonable action.

The first tip that we have is for a final inspection to be booked. I’ve heard of buyers passing up their opportunity to inspect a property. Even if the house is to be knocked over, or if the block is vacant, we recommend an inspection. If the fence has been damaged, if there is rubbish laying around, or if trees have been removed illegally, the buyer has recourse.

Once the property settles, it is very difficult to force a vendor to fix things.

The second tip we have relates to getting a thorough contract review done by a legal professional. The Victorian Contract of Sale features a set of General Conditions which have been crafted specifically to give both vendors and purchasers fair protection from a wide range of potential issues. The general conditions provision for a suitable course of action (depending on the issue) and they also refer to standard penalties that purchasers face in the event of changes and defaults.

Often we find that when contracts are prepared for vendors, some legal representatives will amend the General Conditions introducing special conditions that either strike a general condition, or add to them. 

Sometimes the penalty clauses are significantly bolstered up with higher rates, while other times, we see purchaser’s rights restricted in the event of property damage or incorrect representations made by the vendor.

Signing a contract with special conditions negating or minimising buyer’s rights can create issues down the track if things aren’t right at the final inspection.

We strongly recommend challenging such clauses and conditions with the agent prior to signing the contract.

One useful general condition that we sometimes invoke is that of withholding funds. If there is damage at the property that has clearly occurred since the date of sale, we can explore the concept of withholding an estimated cost of repair if the vendor is not agreeable to/unable to fix the issue. The funds withheld can be up to $5000 and both parties, (vendor and purchaser) deposit the estimated funds in trust until the issue is resolved.

Before embarking on this process, we need to be able to prove the damage has been sustained.

Taking an inspection video, relying on agent listing photos or reverting to the building and pest inspection report are all possible methods of providing proof. Without proof, it is very difficult to challenge some damage.

Another handy inclusion we’ve relied on in the past is the introduction of a condition for the benefit of the buyer. Such inclusions may relate to a responsibility for the vendor to provide the property with all appliances in good working order. Another may be for the vendor to provide the property free of rubbish, debris and furniture.

Not every vendor or agent will be obliging, but when they aren’t, the buyer should ensure that they have tested appliances accordingly prior to signing the contract.

The next tip relates to that of timing. 

Leaving the final inspection to the very last day before settlement is cutting things too fine. A vendor will struggle to rectify an issue or send a tradesperson to a property when there is insufficient time to do so. But inspecting too early also carries risk, (in the event that damage is caused at a later date prior to settlement). Our ideal timing for a final inspection is around a week prior to settlement.

Taking a checklist along to the inspection is a great idea and we never leave the office without one. Our checklist notes all appliances, lights, rooms/exteriors, keys, bins and warranties/instruction manuals.

Our final tip relates to keeping things as friendly and as respectful as possible. An angry vendor and/or agent is upsetting for all, but it’s worse when issues strike that are the purchaser’s fault. Being able to see past a vendor’s boxes and mess as they pack to vacate is important, and working around their preferred times is a great show of respect. Accepting fair wear and tear is another challenge for some buyers, and we often have to explain the difference between a new property and an established property when it comes to settlement handover.

When issues strike on settlement day, (for example, a purchaser’s bank delaying settlement), it’s far easier to ask for forgiveness from a happy vendor than an angry one.

And don’t assume you’ll never encounter the vendor again. Plenty move locally… sometimes across the street.