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Final Verification Of Property Condition Requires Care And, Sometimes, Advance Planning
Written byBob HuntPosted On Tuesday, 27 August 2013 12:07
One of the most important parts of a real estate transaction occurs shortly before closing. No, I”m not talking about anything related to funding. The topic, rather, is the final “walk-through” or, more formally, the Verification of Property Condition.
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In California, the walk-through serves two purposes: (1) It gives the buyer the opportunity to determine that any repairs or modifications that had been agreed upon have actually been completed; (2) It gives the buyer the opportunity to verify that the property has been “maintained in substantially the same condition as on the date of Acceptance.”
The walk-through is not, I repeat, not an opportunity for the buyer to take another look and decide whether or not he really wants to go through with the transaction. Nor is it an occasion to conduct a second inspection and to ask for repairs of conditions that had been there at the time of the first inspection.
It is easy, and somewhat understandable, that the final walk-through may be treated in a somewhat cursory manner. A buyer”s agent may even be complicit in this. After all, who wants a problem so late in the game? But this is one of those times when a buyer”s agent should exercise extra diligence in looking out for his client”s interest, when the client may be too caught up in the euphoria of an imminent closing on his new home.
One of the first things to be noted is that the walk-through inspection should be scheduled in such a way that there will be time to perform any corrective work that might be needed. The standard California contract, produced by the California Association of Realtors (CAR), provides for the inspection to be performed within five days of the projected closing. But that is simply a default number. It is easy, and probably desirable, to schedule the inspection for something like seven to ten days prior to closing.
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Sometimes it is advisable for the buyer to have a specified professional to accompany him on the inspection. An earlier inspection may have called out for the repair of some condition about the furnace, or a water heater drainage arrangement, etc. It might be something that neither the buyer nor his agent fully understood. In that case it would be good to have the inspector or a relevant tradesman come along to verify that the repair had been done correctly. Of course this would probably cost some money. And it would probably be worth it.
Many times the owner himself will do some or all of the repairs that had been called for. With all due respect to handy homeowners, buyers should exercise special care in such situations. Again, it may take a professional to determine that a repair had been done correctly. Moreover, even if the repair is something as mundane as ensuring that the windows open and close easily, the buyer should specifically verify that the work had been done and the results are satisfactory.
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The California contract contains this specification regarding repairs. “Seller shall: (1) obtain receipts for Repairs performed by others, (ii) prepare a written statement indicating the Repairs performed by Seller and the date of such Repairs; and (iii) provide Copies of receipts and statements to Buyer prior to final verification of condition.”
I think it”s a fair guess to speculate that this is seldom done, though it should be. To do so would take both coordination and cooperation on the part of both agents. Which is a good idea in any transaction, anyway.
