April 17, 2019
The very last step in purchasing a property – often literally done on the way to the closing – is the walkthrough. This is your chance to make sure the property is as you expect. Hopefully everything goes smoothly but what if it doesn’t? And what should you be checking in the first place?
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A walkthrough is your opportunity to make sure the property's condition is as expected prior to closing. You'll also want to make sure everything that is supposed to be left behind is and nothing else. If the seller packed up the chandelier or left a bunch of garbage, this is the time to find out.
As crazy as it sounds, it's also to make sure the seller has actually moved out. We once showed up to a walkthrough and the movers were still packing!
As a buyer, your right to a walkthrough is typically written into the contract and ideally conducted within a day of the closing.
It is called a walkthrough for a reason - it is meant to be relatively brief and to check the basics. It is not a full-on inspection like you may have done earlier. Of course, you can verify any repairs from that initial inspection but this is not the time to bring up new complaints about the property's general condition.
The walkthrough is essentially your final sign-off on the property. You don't want to leave a lot of time until closing as that also leaves a lot of time for something bad to happen.
For example, say you do the walkthrough a week before closing. Everything was fine but as (bad) luck would have it, a pipe started leaking in the interim. Nothing major but enough to cause some water damage. It’s very rare for the seller to provide a warranty post closing so that would be your problem. While a leak or other issue could pop up at any moment, the less time you leave between the walkthrough and the closing, the less risk you will be bearing.
Most of the time, walkthrough issues are minor and require a simple fix. For example, one of the stove’s burners doesn’t work or a faucet is dripping. The seller or someone else can fix these items pretty easily.
Sometimes more substantial issues come up. Maybe when the seller was moving out, a hole was knocked in the wall or the refrigerator is no longer working. These types of fixes require a little more time so if possible, we recommend doing the walkthrough the day before closing.
Rather than actually make the repairs, the seller can issue a credit. For example, if the refrigerator did in fact just conk out, the seller can issue a credit for a few hundred dollars and you'd handle it on your own.
There are two types of disagreements that can come up at a walkthrough. The first is if a repair is even necessary.
Most properties are sold as is which means both the seller and buyer acknowledge its condition and are okay with it. However sometimes there are disagreements regarding what that condition was when the contract was signed. Let’s use the refrigerator example again. The seller could claim it didn't work when the property was on the market. Meanwhile the buyer swears they opened it at the open house and it was full of food.
Well written contracts avoid these situations. They will clearly state all the appliances are in working order or vice versa. If you are buying a property that has been vacant, it's not unusual for the seller to explicitly state the appliances are in as is condition to be extra clear. Ambiguity is the enemy.
The second type of potential disagreement is the remedy. Remember, the seller can either make the fix or pay for the fix. If the latter and the seller thinks the buyer is asking for too much, the closing could be adjourned. By doing the walkthrough a day before closing, it reduces the chances of this scenario.
Thankfully both types of disagreements are rare. Whether a fix is required is usually black and white and neither the buyer or the seller wants delay the closing.
Heading into a walkthrough? Here are some items you’ll want to check -