Your Final Inspection Before Settlement: The Checklist That Catches $10,000 Problems

Last month I walked through a property inspection with a client — a $740,000 house in Melbourne's southeast that was due to settle in four days. The vendor's family was still moving boxes out when we arrived. The selling agent was hovering near the front door, eager to wrap things up quickly.

We spent 38 minutes inside. We found a leaking pipe under the laundry sink (taped over with electrical tape — meaning the vendor knew about it), a broken exhaust fan in the second bathroom, two missing light globes, and a fresh coat of paint on one bedroom wall that smelled suspiciously new.

That fresh paint was covering water staining. When I ran my hand along the cornice line, the plaster was soft. The roof above that bedroom had been leaking.

Without a proper final inspection, my client would have settled on a property with an active roof leak. The repair cost? Somewhere between $3,000 and $8,000 depending on whether the roof sheets need replacement or just resealing 1.

The final inspection — technically called the pre-settlement inspection — is your last legal right to physically examine the property before ownership transfers. Under Victorian contract law, the property must be in substantially the same condition as when you signed the contract. If it isn't, you have grounds to delay settlement or negotiate a price adjustment 2.

Most buyers either skip this inspection entirely or rush through it in five minutes. That's a mistake that can cost thousands.

When to do it and who should be there

Schedule the final inspection as close to settlement day as possible — ideally 24-48 hours before. This minimises the window for new damage to occur between your inspection and the actual transfer.

Arrive 10 minutes early. This sounds trivial, but punctuality signals professionalism to the selling agent. Agents who perceive you as organised and detail-oriented are less likely to try rushing you through the process.

Who should attend: you (obviously), and ideally someone with building knowledge. If you're working with a buyer's agent, they should be there. If you have a friend who's a tradesperson — electrician, plumber, builder — invite them. A second pair of trained eyes catches things you'll miss.

Bring a printed floor plan. Mark every issue directly on the plan as you find it, with a brief description and the room location. This creates a visual record that your solicitor can reference if you need to raise issues with the vendor before settlement.

Also bring: a phone with a torch function (for inspecting under sinks and behind appliances), a marble or small ball (for testing floor levelness), and a piece of tissue paper (for testing exhaust fan suction) 3.

The bathroom check: five things in three minutes

Bathrooms account for the majority of post-settlement surprises. Water damage, mould, plumbing failures — these are expensive problems that are easy to spot if you know what to look for.

1. Run every tap. Turn on the basin tap, the shower, and the bath (if present). Check for water pressure — a weak dribble might indicate corroded galvanised pipes that need replacement ($5,000-$12,000 for a full house repipe). Check that hot water comes through within 30 seconds — if it doesn't, the hot water system may be faulty or turned off.

2. Open the cabinet under every sink. Look for water staining, mould, swelling of the cabinet base, or any patches of silicone or tape that suggest a previous leak was patched rather than properly repaired. Our team found electrical tape on a laundry pipe last month — a $200 band-aid on what turned out to be a $1,500 plumbing fix.

3. Flush the toilet. Wait for the cistern to refill completely. Flush again. If the refill is slow or the flush is weak, the inlet valve or cistern seal may need replacing. These are $150-$300 fixes, but they indicate deferred maintenance that may extend to other systems.

4. Test the exhaust fan. Turn it on and hold a piece of tissue paper near the vent. If the tissue doesn't move, the fan motor is dead or the ducting is blocked. Bathroom ventilation is a rental compliance requirement in Victoria — if you're buying this as an investment property, a non-functional exhaust fan needs to be fixed before you can legally lease the property 4.

5. Check for mould. Look at ceiling corners, around the shower recess, and behind the door. Surface mould on silicone or grout is cosmetic and costs $50 to clean. Mould on painted plaster surfaces suggests a ventilation or waterproofing failure that costs $500-$3,000 to properly remediate.

"The best investment property is someone else's well-maintained owner-occupied home. They fix things as they break. When you inspect before settlement, you're auditing the vendor's maintenance habits — and those habits tell you a lot about what the next ten years of ownership will look like." — Joey Don

The kitchen check: four things in two minutes

1. Turn on the dishwasher. Even if it's the vendor's personal appliance and not included in the sale, hearing it run tells you the hot water connection and drainage are functional. If the dishwasher is included (check your contract's fixtures list), run a rinse cycle.

2. Check under the kitchen sink. Same drill as the bathroom — look for leaks, staining, mould, and dodgy repair jobs.

3. Test every cooktop burner. Gas burners should ignite within two seconds. Electric elements should glow within ten seconds. If one burner is dead, the others are probably on borrowed time too.

4. Run the rangehood. Turn on the fan and the light. The fan should create noticeable airflow and the light should work. A non-functional rangehood light is a $20 fix; a burnt-out fan motor is $400-$800 depending on the brand.

Under standard Victorian property contracts, all appliances included in the sale must be in working order at settlement. Your contract should include a clause stating: "All appliances to be in working condition prior to settlement date" 2. If it doesn't — and your solicitor didn't add this special condition — you have limited recourse on broken appliances.

The laundry and hot water system

The laundry is the room most buyers skip during final inspections. It's usually the room with the most deferred maintenance.

Run the laundry taps (hot and cold). Check under the trough for leaks. Inspect the washing machine taps — corroded tap connections are the number-one cause of internal flooding in Australian homes, accounting for over $1.2 billion in insurance claims annually 5.

If the property has a hot water system located in the laundry (common in older homes), check the pressure relief valve outlet. A small amount of dripping is normal and expected. A steady stream suggests the valve is failing and the system is building excess pressure — a safety concern that needs immediate attention.

For gas hot water systems, check the pilot light indicator (if visible). For electric systems, listen for the element heating when you run hot water for 60 seconds.

The typical lifespan of a storage hot water system in Melbourne is 8-12 years. If the system looks original and the house was built before 2012, budget $1,500-$3,000 for a replacement within the first few years of ownership 6.

Heating, cooling, and electrical

Test every air conditioner. Set each unit to cooling mode, wait two minutes, and confirm cold air is flowing from the vents. Then switch to heating mode and confirm warm air. Ducted systems are harder to test — you'll need to check multiple room vents to confirm the system is distributing to all zones.

A ducted heating system that fails post-settlement costs $2,000-$5,000 to repair or $8,000-$15,000 to replace, depending on the system type and house size 7. This is one of the highest-value items you can check during a final inspection.

Walk every room and test every light switch. Flick each switch on and off. Note any that don't work — could be a dead globe ($5 fix) or a faulty switch or wiring fault ($150-$500 fix). For investment properties, all light fixtures must be functional for the property to pass a safety check before leasing.

Check the switchboard. Open the electrical panel cover and look at the circuit breakers. If the switchboard still has ceramic fuses instead of modern safety switches (RCDs), you'll need an upgrade before renting the property. Cost: $500-$1,500 8. Victorian rental regulations require all properties to have working safety switches.

Smell test. Walk through the house slowly and sniff. Fresh paint in one room only — when the rest of the house hasn't been painted — is a red flag. Vendors paint over water stains, smoke damage, and mould. If a wall smells like fresh paint and the vendor didn't repaint the entire house, investigate what's underneath.

The exterior and structure

The exterior takes five minutes and can reveal the biggest problems.

Walk the perimeter. Look at the base of external walls for cracks. Hairline cracks in render are cosmetic and normal in Melbourne's reactive clay soils. Cracks wider than 5mm, or stair-step cracks following the mortar joints of brick walls, suggest foundation movement and need a structural engineer's assessment ($500-$800 for the report, potentially $10,000-$50,000+ for remediation) 9.

Check gutters and downpipes. Are they attached? Are there visible holes or rust spots? Blocked or damaged gutters cause the majority of roof leak problems — and they're cheap to fix ($300-$800 for a full gutter clean and repair).

Inspect the roof from ground level. Look for missing or displaced tiles, rust patches on Colorbond sheeting, or sagging ridgelines. You won't get on the roof during a final inspection, but a pair of binoculars can reveal a lot.

Check the fence lines. Under Victorian law, boundary fences are a shared responsibility, and a fence in disrepair can trigger a notice from your new neighbour requiring you to contribute to replacement costs (typically $3,000-$6,000 for a standard Colorbond fence along one boundary) 10.

Finally, check the garden for any items the vendor has promised to remove. Sheds, trampolines, building materials, old cars in the driveway — if it's in the contract that the property is to be delivered "vacant possession," everything that wasn't there when you signed should be gone.

What to do when you find problems

Document everything with timestamped photos and your marked-up floor plan. Then contact your solicitor immediately — not the selling agent.

Your solicitor can:

1. Request the vendor fix the issue before settlement (most common for small items)
2. Negotiate a price reduction or cash retention from the sale proceeds to cover repair costs
3. Delay settlement if the property isn't in substantially the same condition as at contract signing

Do not attempt to negotiate directly with the selling agent. The agent works for the vendor and has a financial interest in settlement proceeding on schedule. Your solicitor is the only party in this transaction whose obligation is exclusively to you.

For investment property buyers, I'd also recommend scheduling the gas and electrical safety checks (required before leasing) during the same visit if possible. Gas safety: approximately $250. Electrical safety: approximately $250 4. Having these done immediately after settlement means you can begin advertising for tenants the same week.

The final inspection is 30-40 minutes of your time. It protects hundreds of thousands of dollars of your capital. Treat it with the seriousness it deserves.