As a form of mediation, we’ve decided to aim this weeks article at the heart of a problem we see at the end of transactions; in specific, during the final walk-through.
The final walk-through typically occurs before each party settles the transaction at the closing table; usually on or before the day of closing. In the case of a post occupancy agreement, the final walk-through is completed on the date the seller has agreed to give the buyer possession. A final walk-through is the last opportunity a buyer has to ensure the property is being delivered as promised.
Here are 4 common points of conflict during a final walk-through and how each party should handle them:
1. Incomplete Repairs
Sellers take care to keep a record of all receipts and before/after pictures of completed work in the occasion a dispute arises. If for some reason you were unable to complete a repair that was agreed upon by you and the buyer, be honest and disclose the fact before the final walk-through. Giving a buyer notice will prevent any last minute disagreements or a delay of the closing.
Buyers beware of sneaky sellers! The majority of homeowners are good honest people. Having said that, you may run into a seller who either only partially repairs or completely disregards the fixes you agreed upon. In this situation, a buyer can ask the title company to retain a portion of the funds in escrow until the repairs have been completed. Only in the most serious situations should a closing be cancelled. Consider how serious the repair is and whether or not deciding to fix it yourself will save you more time and money in the end.
2. Home not completely vacant
Sellers take care to leave your old home as you would like your new one to be when you move in. Complete the moving process well in advance and leave nothing behind.
Buyers beware of a seller who doesn’t want their stuff. Occasionally, a seller will leave behind some personal belongings or even furniture. The severity of the situation depends on exactly what was left behind. If personal effects were left behind, communicate with the seller and arrange for them to be picked up before the closing.
3. Missing fixtures from the home
Sellers take care to understand the difference between a ‘fixture’ and ‘personal property’.
A fixture is part of the property and is attached to the home. A good rule of thumb is: if it’s attached by a wire or not considered moveable, it’s probably a fixture (e.g. cabinets, chandeliers, etc.)
Personal property is anything that is moveable and not permanently attached. For example: Speakers, sound system, TV brackets, etc.
Sellers need to stick to what was agreed upon in the contract. If you agreed to leave the current appliances, you have a legal obligation to leave them. When entering into a contract, be absolutely clear what you would like to take with you and what you wouldn’t mind leaving behind.
Buyers beware of appliance swapping sellers. Have the inspector you hired provide photos of the appliances present during their visit to be sure the ones you’re seeing in the final walk-through are the same included in the contract. A sneaky seller may swap the appliances you agreed would stay in the home for older ones in hopes of taking them to their new home.
4. Damage to home during move-out
Sellers take care to move out carefully. Again, leave the home in the condition you would like your new one to be in when you arrive.
Buyers beware of excessive damage left behind by sellers during their move. But, pick your battles carefully. Don’t feel the need to enter into a discussion with the seller about a minor scratch on the wall or the floor. Keep in mind you may actually cause more damage when you move your own things into the home. A hole in the wall or permanent damage to the structure of the home is cause for concern but a scuff mark is not.
It takes two…
Both parties can ensure a smooth transition by being clear from the beginning. Sellers must be completely honest about what they intend to keep or leave behind when discussing a listing agreement with their agent. Buyers need to be clear with their expectations and ensure they are holding the seller accountable while also being reasonable themselves.
At the end of the day, both parties want to move forward; buyers want their new keys and sellers want to move on. Understanding each parties responsibilities allows for a smooth and quick transition during the final walk-through.