We found ourselves in a situation that turned an otherwise flawless, painless home sale into a slight nightmare.
That story is below – we also talk about the things you should absolutely make sure of when you do your final walk-through before buying a home.
During the purchase of a home, you should negotiate a final walk-through to take place before close. Don’t just go through the motions on this one. It could save you a headache and hundreds or thousands of dollars. Here is the language used in our Tennessee purchase and sale agreement:
Buyer and/or his inspectors/representatives shall have the right to conduct a final inspection of Property on the Closing date or within __ day(s) prior to the Closing Date only to confirm Property is in the same or better condition as it was on the Binding Agreement Date, normal wear and tear excepted, and to determine that all repairs/replacement agreed to during the Resolution Period, if any, have been completed. Property shall remain in such condition until Closing at Seller’s expense. Closing of this sale constitutes acceptance of Property in its condition as of the time of Closing, unless otherwise notes in writing.
I had some lovely clients that were so easy to work with. We went under contract, they wanted to close quickly, the lender was on-board, the appraisal came in quickly – a dream situation.
During the inspection, it was noticed that the air initially didn’t want to come on. It eventually did and the inspector noted that it needed to be serviced, so he recommended calling an HVAC professional. I think everyone involved thought this was something that should be done in the next couple of months – mistake #1.
During the final walk-through, on a very cold day, we noticed that the thermostat was set on 60 degrees. I turned it up to make sure the heat was working and walked around looking at other stuff. Standing in one of the rooms, I felt hot air and that settled my mind about the heat. We thought the sellers must have turned it down when they left, to save some money – mistake #2.
We went to closing a couple of hours later and everything was great – it went quickly – everybody was happy.
Later in the day I received a text from my clients that it was really cold in the house and the heat wasn’t blowing. Long story short, the blower in the HVAC unit was toast. It was still under parts warranty, so that was covered, but the labor was not. Worse, the home warranty the seller purchased for them would have covered everything, with a $50 deductible, if it had been an old beat up HVAC with no warranty.
A $500 bill, on the first day moving in to a new home, will make an otherwise flawless purchase a nightmare. And, it could have been much worse.
I’m not going to point fingers or say who knew what – no reason to. What I do know is that I could have protected my clients better. I made this one right and we got them fixed up by the next day. But, this will never happen again.
Final Walk-Through Checklist
Follow these steps carefully and don’t phone it in on any of them. It’s exciting when you walk-through your soon-to-be new home and the tendency is to measure for window treatments and assign rooms. But, spend time checking out the functional aspects of the home.
These checks depend on the inspection agreement. If you are accepting anything in a degraded or non-functioning state – then expect that it is in that state. A final walk-through is your time to make sure the homeowners fulfilled any agreements for repairs or property and left the home in “same or better condition”, according to the contract.
Don’t feel rushed
Don’t meander, but don’t feel like you can’t thoroughly check every aspect of the house. It’s not an inspection, but you will be spending some time there and that’s perfectly acceptable – don’t let anyone tell you it’s not.
Is the home empty?
The sellers should be moved out when you perform your final walk-through. If they aren’t, we recommend doing a few checks and then have your agent set up another walk-through once they’ve moved out.
Several things could happen while moving out, so you want to make sure you view the home once the seller won’t be returning.
Were utilities left on?
If the utilities weren’t left on, you can’t do an accurate walk-through. This is a tough one.
Is it dirty?
There is no definite measurement for how clean the house should be. “Same or better condition” dictates that the home can’t be trashed – unless it was always trashed and you’re purchasing it “as is”.
If you show up and feel the home is not as clean as it was during your showing, have your agent push them to clean it.
Heat and air unit
No matter what the temperature is outside, do the best you can to test both the heat and the air conditioning. Turn it way up or way down when you first get to the house.
If it’s cold outside, turn the heat up to 80. If it’s warm outside, turn the air down to 60. Make note of the temperature the thermostat currently shows so you can compare when you circle back to check its progress.
As you move throughout the house, feel the vents and make sure the air is blowing and it feels either warm or cool.
Once you’re satisfied it’s working, let the temperature get to a point to where you can then set the thermostat in the opposite direction and repeat your checks.
If the fan takes an abnormal length of time to come on or it doesn’t blow warm or cool air, it likely has an issue.
In extreme temperatures any HVAC unit is going to struggle to bring the temperature down to where it’s set. Generally, a functioning unit can lower the inside air temperature about 20 degrees.
For example, if it’s 110 degrees outside and the air in your home is 95, don’t expect the unit to lower the temperature inside to 60. It should be able to get it down to about 75 degrees.
Check included appliances
- Washer and Dryer
If the sellers agreed to leave appliances, turn them on and make sure they’re functional. Open the fridge and feel for cool air and the freezer for really cold air.
The oven and stove should heat up – the dishwasher should come on and run through a cycle – the washer and dryer, likewise.
Examine the walls
During a move, the walls can get nicked and scraped. Any damage to the walls or trim should be repaired by the seller before close.
As the sellers take pictures down and remove nails and screws, they also need to fill holes and touch up those areas.
Nail pops are not something that should be brought up unless that was a repair agreement. Nail pops are normal and aren’t a result of the seller’s action.
Are negotiated repairs completed?
If you went through an inspection negotiation period and the seller agreed to some repairs, now is the time to make sure they were performed.
Your agent should have collected any receipts from the sellers. Examine the repairs and ensure they are performed to your liking.
Is included property missing?
Did the sellers agree to leave a refrigerator or other property? Make sure they actually did. This is a big reason to walk-through after they’re completely moved out.
Often, sellers think they don’t have to maintain the yard after going under contract. If you show up and the yard looks like a jungle, have them take care of it before close.
What to do about issues
There are a few different ways to handle issues that you discover during your walk-through:
Depending on the severity, you may decide to ignore the discrepancy. A small hole or two in the wall may not be enough to bother with.
You may refuse to close until the seller meets the requirements of the contract. This should be the course if the utilities aren’t on, for example. This can make the deal fall through, if the seller doesn’t agree.
Seller offers a concession
In lieu of delaying closing and waiting for the seller, you could ask for a concession. Cash toward closing, money off the sale price – there are a couple of options.
Hold some of the seller’s money in escrow
Some money can be held back in an escrow account if there are issues. You may agree to estimate the cost of the repair that wasn’t performed or property that’s missing and have the closing agency hold back about 150-200% of that number. Should the seller not meet the requirements in the time agreed, the money goes toward making it right.
Don’t take your final walk-through for granted. Spend the time and attention to make sure you’re buying what you thought you were buying.
If you sign the closing papers, you have accepted the home as it is. Your only recourse at that point would be to take the seller to small claims court – it can be hard to win after signing off on your final walk-through. The headache and money involved would more than likely not be worth it.