Real Estate NewsThe Final Walk Thru Inspection
Who is going to remove the boat?
Before the closing takes place, it is customary that the buyer makes a final
walk thru inspection of the property. Is the property in the same condition
as when the buyer initially saw the home? Is the yard the same? These
questions should be answered prior to the actual day of closing, but
oftentimes it is not possible, as the seller may be moving out the day of
closing, and not able to get everything done at the time of the inspection.
What happens when the buyer makes the final inspection and many items found
in an inspection report have not been corrected or the old boat in the yard
has still not be removed? Who is responsible for making these corrections
and should the closing be held up?
The first answer that would come to mind would be to delay the closing until
the seller has repaired or cleaned up the property, including removing a boat
or any other piece of equipment left in the backyard. This may often not be
possible for several reasons. The buyer may be obtaining a new mortgage on
the property and the interest rate on the buyer"s loan may have been "locked
in" by the lender or mortgage broker. This locked in interest rate may
expire on the day of closing. If not closed on time, the buyers would have
to go back to the lender to renegotiate a new interest rate and they would
generally be charged a "redraw" fee for new loan documents. The seller may
have purchased a new property, and he may need the sales proceeds from his
previous house to buy his new home, so a delay on the sale would delay his
new home sale. The best solution is to try and come up with a compromise at
the closing table.
Some closings may go quite quickly, but when there is a dispute, the closing
can go on for hours. The longer the buyer and seller dispute the items which
need to be corrected, the more tempers seem to wear thin, all the parties get
tired, and a solution is hard to find. The best remedy in the case where the
property is not in the condition expected by the buyer, is to immediately
start addressing each item in dispute, one by one, and see who would be
willing to do what repair, and under what conditions either party is willing
to accept a compromise. The seller may offer to fix the shower door, hire a
cleaning service for the home, and supply new springs for the garage door,
but the buyer may need these things done immediately and the seller may not
be able to act that quickly. An old boat or piece of equipment found in the
backyard may not be as easy to remove quickly, so a compromise between buyer
and seller is necessary.
In order to facilitate the closing, the seller could offer to place money "in
escrow" to be released to him only after the repairs have been completed.
Or, the buyer and seller could agree on a price that the repairs might cost,
and the seller could issue the buyer a check for these repairs. In that
case, the closing agent will draw up a short addendum, outlining what the
buyer and seller have agreed, and that the buyer is willing to accept the
seller"s check in lieu of requiring any additional clean up work. There may
be one or two large items that the seller promises to remove, such as the old
boat or sacks of sand, and the buyer may offer to give him 10-15 days in
which to remove the items.
It is always best to try and arrive at an equitable compromise between the
buyer and seller. The seller may be moving only a few blocks away and
returning to the neighborhood hood to visit old friends, so whenever possible
it is best to not make an enemy out of your buyer or seller but do whatever
is necessary to make both parties happy.