The Final Pre-Closing Walkthrough (a Summary and Checklist)

In many real estate transactions, the buyer has the right or option to do a "walkthrough" or "final walkthrough" of the property being purchased before the closing (i.e. before the completion of the purchase transaction). The final walkthrough generally consists of a less formal inspection of the property, verification that any promised repairs were completed, and a visual overview that the general condition of the property has not changed significantly. Essentially, the buyer doing a final walkthrough is making sure that the property is the same property, in the same condition, with the same amenities, that was bargained for. While many buyers take mental possession of the property before closing and begin turning their thoughts to remodeling, moving, or finding furniture or tenants, a wise buyer will not pass up the opportunity to take advantage of the final walkthrough and ensure that no major issues remain before the final settlement (closing) occurs.

Timing of the final walkthrough can be important. Many buyers, especially of residential properties, perform the final walkthrough the day before or the day of closing. Doing the walkthrough this close in time to the closing may not leave enough time to resolve any major issues or handle any needed repairs. However, doing the walkthrough too far in advance of the closing could mean the buyer is taking the risk that the property will not be in the same condition after closing as it was during the walkthrough. Your real estate professional can coordinate the timing of your walkthrough based on his or her impressions and knowledge of your individual transaction.

The time involved for the performance of a final walkthrough can be less than 30 minutes for a small studio condominium and more than a full day for a luxury home or large commercial building. In certain situations a buyer might be advised by their real estate professional to bring a home or property inspector to the final walkthrough for a more discerning and experienced opinion of the condition of the property, and needed or completed repairs, before closing. Walkthroughs are especially important if repairs were agreed to between buyer and seller, an event such as a storm has occurred since the property was last viewed, or another major event has transpired that merits a detailed look at the property before closing.

Ideal Conditions for a Walkthrough

Certain conditions and preparations make doing a walkthrough more efficient and effective.

In an ideal walkthrough situation, the property is vacant. If a home is being purchased that a buyer will be utilizing as a residence, having the property vacant and empty will mean that more of the property is visually accessible for inspection. However, if an investment or commercial property is being purchased, the buyer usually prefers the property to be filled with good tenants for income purposes, unless immediate remodeling/renovating is contemplated.

Making sure all utilities are on and functioning will allow more of the systems to be tested in the home or other building (e.g. water = faucets and appliances, electricity = lights, outlets, appliances, etc.).

Bringing a camera, camcorder or other recording device can help a buyer remember certain items that merit attention and to more accurately recall problem areas after the walkthrough is complete. If the property being purchased is a small studio condo, a handheld phone or smartphone will often have enough memory to accomplish this task. At a minimum, if a camcorder is not available, bring pen and paper to keep notes of what is found during the walkthrough. Ideally, the buyer will have a checklist of items they want to view during the walkthrough and will cover everything on the list.

The above conditions are not always possible as the seller is not always leaving the house immediately and other variables impact conditions during a walkthrough.

What to Check/Look For

INTERIOR:

• Check heating, air-conditioning and thermostat functionality. Does heating or cooling begin when called for by the thermostat? Does the warming or cooling stop when the temperature is reached?
• Do all ceiling fans, doorbells, intercoms and light fixtures work?
• Do all outlets and electrical and light switches work? Use an outlet tester or small clock or radio to test.
• Does the garage door work? Do the remotes for the garage door(s) all work?
• Does water get hot to all faucets? How long does it take to get to the higher floors?
• Is the alarm system functioning?
• Are all smoke detectors/carbon monoxide detectors/radon detectors (if any), etc. – installed and functioning properly?
• Are the central vacuum and built-in stereo or speakers functioning properly?
• Do all major appliances work (garbage disposal, trash compactor, microwave, dishwasher, all burners on the range, oven, convection oven, warming drawer, refrigerator, washing machine and clothes dryer, freezer, wine cabinet or coolers, etc.). It is a good idea to ask for owners’ manuals and warranties for appliances.
• Do all exhaust fans work (kitchen and bath)?
• Do gas fireplaces work?
• Do the damper/fan/other chimney components work properly?
• Do window coverings function properly?
  • Window coverings are expensive and are an often overlooked item in a real estate purchase transaction.
• Are any windows cracked?
• Do the windows and doors function properly?
• Are any screens or storm windows missing or damaged?
• Is the furniture purchased with the property still in the same condition?
• Does the hot tub/spa/sauna work properly?
• Do any walls or ceilings have new damage (e.g. scrapes, dents, holes, water damage)?
• Are there any signs of mold?
• Is the home clean or "broom clean"?
• Did the seller leave all remote control devices (for fans, lights, window coverings, alarms, garage doors, etc.)?
• Do agreed upon fixtures and appliances listed in the purchase agreement remain on the property?
  • If you agreed to an expensive cabinet-faced or stainless steel refrigerator and during the walkthrough you realize that the expensive refrigerator has been removed from the property and replaced with the old avocado-colored refrigerator from the 1970’s that has been in the garage since the 1970’s – you should know this before closing.
• Have agreed upon repairs been completed (and completed correctly).
  • It can be a good idea to bring a copy of the purchase agreement with you to the walkthrough to make sure all agreed upon repairs have been completed in a satisfactory manner.
  • Another good idea is to obtain receipts or invoices from the seller as evidence of the repairs, which has the added benefit of showing who did the work if you need to contact the repair person in the future.
• Is there any new damage to the property (large scratches in counters, cabinets, floors, etc.)?
• Are there any unwanted items left in the attic (e.g. old boxes or garbage), in the basement, or other areas of the property?
• Generally, if you are purchasing a home, the home was often lived in or was staged for listing purposes. When furniture, art and other items are removed, it is a good idea to check anything on the property that could not be checked during the initial inspection.
• Did the seller leave any necessary owner’s manuals?
• Did the seller leave all keys and access instructions? (E.g. house, basement, shed, garage, clubhouse, safe combinations, specialized rooms, mailbox, other outbuildings, alarm codes, etc.). Note: These items are sometimes supplied at the closing and may be split between the walkthrough and the closing (i.e. the seller may leave all or most keys to the property at the house during the walkthrough and then provide alarm code instructions at the closing).

EXTERIOR:

• Is there any change in condition or damage to the siding, windows, shutters, roof, mailbox or other property amenities?
• Do exterior and garage lights and electrical outlets work properly?
• Is the deck/stairs/porch still solid and secure?
• Is the landscaping the same or as agreed to?
• Does the irrigation system function properly?
• Does the driveway heater work?

Keep in mind that any damage done to the property during the walkthrough may be the responsibility of the buyer whether the property is purchased or not. Stop any running water, operating appliances, and other hazards before leaving the property.

What to Do About Problems Discovered during the Walkthrough

If you found something in the walkthrough that bothers you or makes you reconsider the purchase, you have several options, including:

1. Walk away from the deal: It takes time and money to find the right property, and you might lose your earnest money and an otherwise good property if you decide to not complete the purchase. But if walking-away is the right decision for you – this is typically an option.
2. Attempt to postpone the closing: Often a seller will need more time to make repairs or the parties will need more time to agree on an alternative solution.
3. Take legal action: In certain situations, if a seller has not performed according to the purchase agreement, the buyer will have legal rights or options that can be pursued to remedy the default. However, in most cases an amicable solution to the problem will make the closing smoother and more efficient.

A final walkthrough or walkthrough is a valuable tool that can eliminate surprises after the closing. If you have the option of doing a final walkthrough, in most transactions you should not skip this step. A good real estate professional can coordinate the walkthrough in a purchase transaction for you. If you want Real Estate Metro to match you with an experienced real estate professional for your next purchase, please click on the link below to get started.

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