You’ve found the perfect house…the offer was accepted…the loan is secured…you have worked through all of the home inspection issues, the appraisal is done, and you’re about to close on the transaction.
There’s one more important step we urge you not to overlook before you sign the closing documents: the final walk-through, which will be the home buyers final inspection of the property.
The Final Walkthrough of The Home
The final walkthrough is the penultimate step in buying a home and should be done as close to the closing date and time as possible. It is a critical part of the home buying process and the buyer’s final check of the physical condition of the property.
The purpose of the final walk is to make sure that the home is in good shape and that you, the home buyer, are getting everything your real estate agent wrote into the sales agreement.
This generally includes all window treatments, attached light fixtures (e.g. chandeliers, track lighting), appliances, area rugs/carpets, and spas/pools, unless otherwise indicated in the agreement.
The final walk-through is the last chance for the new homeowner to make sure the property is in acceptable condition. Failing to do a walkthrough makes it difficult to get the seller to make things right after the closing because you have no leverage.
Inspection Items Check on the Final Walk
When you performed your home inspection, the inspector should have produced an inspection report, identifying any problems.
From this report, you and your buyer’s agent should have produced a list of requested repairs for the seller’s agent to present to the home sellers. Both sides will negotiate what inspection issues the seller is willing to do, and what they are not willing to do.
Once this list of negotiated repairs is finalized, the home buyer should never assume they have been done, they need to ensure that any previously agreed-upon repairs have been completed at the walkthrough.
Bring a copy of the inspection report to the walkthrough, as well as the list of repair items the seller agreed to. You’ll want to check these items in order to make sure they have been completed. The seller should provide receipts for any repairs, but you still want to get eyes on the repairs to make sure they were done and done correctly.
The home inspector should have inspected all of the major systems of the house, like plumbing, electrical systems, and HVAC systems. Pay careful attention to make sure things are working correctly, turn on all the light switches and, test the outlets to make sure they are working.
Depending on what time of year you are closing, the HVAC system can be a problem. The home inspector will inspect the system but depending on the outside temperature, they may not be able to test either the heat or the air conditioning. If possible, test these systems on your final walk-through. Remember, this is your last opportunity before you own the home.
Cleaning and Condition at Final Walkthrough
This one is always difficult because everyone seems to have a different standard of “Clean”. This is why it’s always best to spell out your expectations in the purchase contract. Asking for the home to be professionally cleaned is a great idea. If there are problems or if the buyer is unhappy with the condition, the cleaners can come back and make it right.
Make sure that the cabinets and garage have been emptied of the seller’s personal belongings, the toilets, sinks, dishwashers, and laundry machines are functional, the HVAC systems work, and all trash has been removed.
You should also be looking at the overall condition of the property. Now that the furniture is gone, you’ll have a much better look at the property. You should look for damage that was previously hidden by carpets or furnishings.
Another issue is damage caused by the sellers moving company, or the previous owner while moving out. It’s best to address these disputes with movers quickly. In most cases, these issues are covered by the movers’ insurance policy and are fixable. It’s best to address these issues prior to closing, and, more importantly, prior to your movers coming in.
Make Sure Seller Inclusions and Exclusions are Correct
When your realtor wrote the contract to purchase the home, they should have specified what was included and what was excluded.
Make sure to bring a copy of your purchase agreement with you to the walkthrough in order to identify what you and the seller agreed upon. This could include things like window coverings, yard equipment, kitchen appliances, the washing machine, and/or clothes dryer.
Just as important as inclusions are exclusions. These are the things you want the seller to take. In the process of moving, sellers off and get frustrated and just choose to leave things at the house, they don’t want to take to their new house.
Items that are left behind can often be hard to dispose of. Things like old paint, old tires, and other hazardous waste.
In most cases, you won’t want these items either, so the final walk-through is a great time to identify these items and make sure they are removed.
Options
If the final walk-through reveals problems, the new owner may have legal recourse. Before contacting an attorney, the homebuyer should pursue a couple of different options
The best way to resolve these types of issues is to reach out to the listing agent with a list of problems or issues, and see if you can work out some kind of acceptable resolution.
If this doesn’t work, you are going to need to look at the contract. When agents write a contract, they need to account for as many variables as possible.
Of course, nobody can accurately predict all of the things that can go wrong in a real estate transaction, but a good agent should have enough experience to include as many contingencies as possible in the contract in order to protect their client.
If the seller refuses to make things right, the buyer does have the option of refusing to close. Most real estate contracts have language that talks about the buyer not refusing to close, but if the seller has not acted in good faith and performed to the terms of the agreement, this language doesn’t really apply.
Understand that the seller will try to keep the home buyers earnest money, and the possibility exists that the buyer may also lose their interest rate if the loan lock expires during this time frame.
In some cases, these losses are an acceptable alternative to closing on a property that might present bigger problems further down the road.
Another alternative is to close but use an escrow account to hold proceeds until the terms of the contract are fulfilled, or put repair funds into an escrow account; these funds are used to pay for any repairs after the closing.
The final option is to close the transaction and then pursue legal action against the seller after closing. We usually see this type of action used in cases where the buyer discovers a negative condition related to the property the seller failed to disclose.
New Construction Walkthroughs
Final Walkthroughs aren’t just for resale homes, they are important for new construction as well. Home builders generally have a process for managing the final walk, this is because they usually offer a warranty. The walkthrough is the builder’s way of setting a baseline for any subsequent warranty claims.
It is also a great idea to do a home inspection on a new construction home. Inspectors often find issues that result in those gaps between construction trades and their individual responsibilities. We often see issues with things like faulty electrical outlets or gas leaks at the water heater.
A good builder will always welcome the inspection as an opportunity to show how awesome their product is. Conversely, shoddy builders will fight to keep the inspector out, this should be a sign.
In Conclusion
The final walkthrough is your last opportunity to make sure you are comfortable with your home purchase. Don’t allow the seller or any parties involved with the transaction to force or bully you into closing on a home that isn’t what you thought you were buying.
Know your rights and responsibilities, and make sure you are getting what you are paying for.