"We're about to close escrow, why are we doing another inspection?"
It's a great question, because the answer probably isn't exactly what you think:
The final property walk-through is an essential step when preparing to close escrow in California real estate. It serves the purpose of allowing the buyer to inspect the property one last time, ensuring that it is in the agreed-upon condition and that any repairs or agreed-to work have been completed. Unlike a contingency, which allows the buyer to cancel the contract if certain conditions are not met, the final walk-through is not a contingency but rather an opportunity for the buyer to verify the property's condition.
During the final walk-through, the buyer typically examines the property to confirm that it is in the same state as when they made the offer, taking into account any repairs or improvements that were agreed upon during negotiations. The buyer should ensure that the property's systems (such as plumbing, electrical, and HVAC) are functioning correctly, that agreed-upon repairs have been completed satisfactorily, and that no new issues have arisen since their last visit.
Possible outcomes of the final walk-through include:
1. Property in the agreed-to condition: If the property meets the buyer's expectations and is in the agreed-to condition, the buyer proceeds with the closing process as planned. They may sign off on the final walk-through, acknowledging their satisfaction with the property's condition.
2. Minor issues or incomplete repairs: In some cases, the buyer may discover minor issues or incomplete repairs during the walk-through. These issues could include cosmetic items, such as paint touch-ups or missing fixtures. In such cases, the buyer can discuss the matter with their real estate agent or attorney to determine the best course of action. It may be possible to resolve these minor issues through negotiation, such as requesting a credit or escrow holdback to cover the cost of addressing them after the closing.
3. Major issues or significant non-compliance: If the buyer encounters major issues or finds that the property does not meet the agreed-to condition, it can complicate the closing process. Major issues could include significant damage, the presence of undisclosed problems, or failure to complete substantial repairs. In such cases, the buyer should immediately inform their real estate agent or attorney to discuss the options available. Possible actions may include requesting repairs, negotiating a reduction in the purchase price, or, in severe cases, cancelling the contract and seeking legal remedies.
If the result of the final walk through is that all lis as expected, the buyer will complete a Verification of Property form that acknowledges that fact. If the buyer does not send the VP, as it is known, they are leaving open the door open to pursue the seller for items that are not as agreed or expected. For this reason it is important that the listing agent follow up to confirm that this form is completed and recieved by their client.
It's important for buyers to conduct the final walk-through as close to the closing date as possible to minimize the chances of new issues arising between the walk-through and the closing. By carefully assessing the property's condition during the final walk-through, buyers can protect their interests and ensure they are getting the property they agreed to purchase.
John Collins is twenty year resident of the San Diego coastal community, and a successful residential real estate agent and Realtor® since 2013. He specializes in the sale and purchase of San Diego real estate including luxury homes, condos, townhomes, investment properties, and first time buyers. John Collins is licensed with the State of California, CalRE# 01948818 and holds professional designations in real estate negotiation, real estate luxury home marketing, and handling distressed properties.
John Collins runs Collins Coastal, and is affiliated with Coldwell Banker realty. He is a highly rated San Diego Real Estate Agent. See His Google Business Profile And Reviews Here.