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An accepted offer isn't the finish line. Finance, inspections, vendor delays and the property's condition can all cause problems before settlement. Here's how to manage them.
Between an accepted offer and settlement, four things most often go wrong: finance falls through or is delayed, a building and pest inspection finds problems, the vendor can’t settle on time, or the property’s condition changes. Securing formal finance early, inspecting before you sign, keeping plans flexible and doing a pre-settlement inspection reduce each risk.
Having an offer accepted on a property feels like the hard part is over. In reality, the period between signing a contract and settling can be one of the more stressful stages of a property purchase, and it is where deals can still fall apart.
Understanding what can go wrong during this window and taking steps to manage those risks early puts you in a much stronger position to get to settlement without unwanted surprises.
1. Finance falls through or is delayed
A pre-approval is not a guarantee of formal approval. Lenders conduct a full assessment once a property is identified, and issues can emerge at that point that were not apparent earlier.
A change in your employment situation, a new debt, or a lender valuation that comes in below the purchase price can each create problems after you have already signed a contract. Avoiding this comes down to preparation. Make sure your financial position is stable and avoid taking on new credit between pre-approval and settlement.
If the valuation comes in low, the lender will lend against the lower figure, and you’ll need to make up the difference or restructure the loan. Ask your broker whether the lender can value the property before you sign, and check whether your contract includes a finance clause that gives you time to secure formal approval. Our article on four reasons a home loan application may be declined covers the common pitfalls.
2. Building and pest inspections reveal unexpected problems
A building and pest inspection carried out after exchange can uncover issues that were not visible during open homes. Structural defects, rising damp, termite activity or roof problems can range from manageable to deal-breaking, depending on the severity and cost to rectify.
Where possible, arrange inspections before you sign rather than during a cooling-off period, so you have time to assess the results properly. If issues do emerge after exchange, your conveyancer can advise on what options are available to you under the contract. Our guide to understanding property inspections explains what the reports cover.
3. The vendor is unable to settle on time
Settlement delays do not always come from the buyer. Vendors can face their own complications, including delays in finding or settling on their next property, issues with discharging their existing mortgage, or problems with the title.
In a chain of related transactions, a delay at one end can ripple through, affecting everyone else. Building some flexibility into your own arrangements where you can, including your moving plans and any bridging finance, reduces the pressure if settlement does shift. Your conveyancer should be in regular contact with the vendor’s representative in the lead-up to the settlement date.
If you’re buying and selling at the same time, read the pros and cons of a bridging loan before you commit to settlement dates.
4. The property condition changes before settlement
You are entitled to take possession of the property in the same condition it was in at the time of sale. In practice, problems can arise if the vendor removes fixtures or fittings that were included in the contract, or if damage occurs to the property between exchange and settlement.
A pre-settlement inspection, typically carried out in the days before settlement, is your opportunity to check the property against the contract and raise any concerns before the keys change hands.
Pre-settlement inspection checklist
Take a copy of the contract and check:
- fixtures and fittings listed in the contract are still in place
- appliances, hot water, heating and cooling work
- no new damage to walls, floors, doors or windows
- the vendor’s belongings and rubbish have been removed
- keys, remotes and access codes are available
- any repairs the vendor agreed to have been completed
Arrange building insurance from the date the risk passes to you under the contract, which may be before settlement. Ask your conveyancer when that is.
| Risk | When it tends to happen | How to reduce it |
|---|---|---|
| Finance delayed or declined | After you sign, during formal approval | Keep finances stable, avoid new credit, value early |
| Inspection finds defects | After exchange, if not done earlier | Inspect before you sign |
| Vendor can’t settle | In the final weeks | Flexible moving plans, regular contact through your conveyancer |
| Condition changes | Between exchange and settlement | Pre-settlement inspection and insurance from the right date |
Get finance sorted early
Getting the right finance in place well before settlement reduces one of the most common sources of stress during this period. Our steps before making a property offer and spring buyer’s checklist cover the preparation, and if you’re buying at auction, where there’s no finance clause, read our tips for buying at auction.
A mortgage broker can help you compare home loan options and manage the finance process from application through to settlement day. Attain Loans is a mortgage broker in Melbourne’s west that works with buyers from pre-approval to settlement, subject to each lender’s assessment.
This article is general information only and doesn’t take into account your objectives, financial situation or needs. Consider whether it’s appropriate for you and speak with a licensed professional, including a conveyancer or solicitor, before making a decision.
Further questions
What is a pre-settlement inspection?
What happens if the bank valuation comes in lower than the purchase price?
Can finance fall through after pre-approval?
What happens if the vendor can't settle on time?
How long is settlement in Victoria?
This is general information only and is subject to change at any given time. Your complete financial situation will need to be assessed before acceptance of any proposal or product.
