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Preparing For Closing Day

Preparing For Closing Day

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Everyone’s favorite part of any real estate transaction is Closing Day! However, sometimes a last-minute issue throws a wrench in that plan and causes delays and additional expenses that could have been avoided. Most last-minute issues stem from the “Walk-through”; both the FAR/BAR Residential Sale and Purchase Agreement and the “AS IS” Contract (the “Contracts”) give the Buyer an opportunity to conduct a Walk-though. 

What is a Walk-through? 

A walk-through is the opportunity for the Buyer (or their representative) to inspect the Property to confirm the following: 

  1. All items of Personal Property are on the Property; 
  1. Verify that the Seller has maintained the Property and made any repairs and/or replacements as required by the contract; and 
  1. Has met all other contractual obligations

Personal Property 

Section 1. (d) of the Contracts outline all of the Personal Property that conveys to the Buyer from the Seller at Closing. This includes all items owned by the Seller and existing on the Property as of the date the offer is presented. To avoid an issue it is important for the Seller to review this list and ensure all applicable items are left on the Property and are functional.  

Maintenance and Repairs 

Section 11 of both Contracts require that a Seller maintain the Property in the condition that it was in when they signed the Contract through the Closing Date; this includes the lawn, shrubbery, and pool. Sellers must understand this obligation to ensure there are no surprises at the walkthrough.  

If the parties agreed to any repairs during the contract, the Seller should ensure those repairs and/or replacements are complete by the Closing date, and any necessary documentation required by the Contract is available.  

Other Contractual Obligations 

In addition to the requirements above, Sellers are also required to provide utility service to the Property for the walk-through. While there may be a temptation to have utilities turned off before Closing, utilities must be on at the Property on the Closing Date so that the Buyer can adequately conduct the walk-through and ensure all systems are functioning as intended.  

If the parties negotiated any other terms into the contract, they should verify any pertinent documentation at the walk-through before Closing.  

If the Seller fails to meet the requirements above, it could result in the Seller having to deal with an expensive Escrow Hold back or having to provide the Buyer with a credit at Closing to avoid potentially being in breach of contract, both of which could be much more expensive and time consuming for everyone involved. 

Please contact your trusted local real estate attorney if you have questions about walk-through and the parties’ options under the contract. 

  

Picture of Natasha Selvaraj, Esq.

Natasha Selvaraj, Esq.

Natasha primarily practices in the areas of residential and commercial real property transactions.

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