Here’s a short story that shows the importance of a final walk-through.
There are a few critically important steps to follow when it comes to buying a home, and there’s one, in particular, that I see buyers neglect all too often: the final walk-through. Becoming a new homeowner or first-time investor is exciting, which is why many buyers find themselves wanting to close as soon as possible. (Plus, with everyone’s increasingly busy schedules, locking down a closing date can be a whole chore by itself).
However, no matter how anxious you are to close, the final walk-through is not to be rushed. Taking ownership of a property means taking ownership of all the potential problems that come with it. Here are the main steps for making sure a property’s been well-kept by its seller (timestamps included for your convenience):
1:45 — Test all plumbing items
2:11 — Test all appliances
2:31 — Test for active or covered-up leaks
Now let’s look at a recent example of what happens when you do find major issues on the final walk-through. What was supposed to be a normal closing day for my clients in Hoboken quickly became a gross, stressful day…
It started out normal; per our checklist, we went through each of the property’s four floors and flushed all toilets, ran all sinks, and tested all showers. However, when we got down to the basement, we found a complete mess of sewage back-up.
The first thing you must do in that kind of situation is to document it, then forward it to the buyer’s attorney. Since I have a background in contracting, I was able to provide my buyers with a worst-case scenario cost—as in, what would it cost if this entire plumbing system needed to be replaced? From there, you can negotiate an agreeable amount of money that can be deposited into a neutral escrow account. What does ‘neutral’ mean here?
Let’s say $10,000 was deposited into that escrow account. If indeed we close and it costs $10,000 to remedy the issue, then all of that money would have gone to the buyer. If, however, the seller gets out in front of the issue and has a plumber to verify that things were fixed properly, then the money set aside in that account could return to the seller. Now, if the seller’s remedy wasn’t enough and more work is still needed, then that additional money would come out of the escrow account. Even in the messiest of situations, agreements can still be reached amicably and wisely.
I hope you found value in this video. As always, if you have any questions or topics you want to talk about, just give me a call or send me an email. I’d love to hear from you!