Follow up on Photo Finish

The final walkthrough on a property prior to closing is the time for the buyer to see the house as it will be when he moves in. According to our contracts, as I said previously, the property must be in substantially the same condition as it was at the time the contract was ratified (final signatures were all in place, earnest money changed hands), utilities must be on and the house must be broom clean. An agent should instruct his sellers, at the very least, on these basics, however, a good agent will go beyond the basics. It's not a good idea to plan your move the day of the closing, you should give yourself time to fix any "surprises" - you move the dresser and there's a large crack in the wall you didn't know was there, a window is broken by a careless mover, the carpet is rolled up and there's a great big stain right smack in the middle of the floor (all of these things and more have recently happened). Believe me, it will be a lot cheaper to fix these surprises yourself prior to the walkthrough than to have the buyer's agent insist on holding back money from closing (escrow) to have the problem resolved. You'd better prepare youself to kiss that escrow goodbye or forfeit a much larger sum than it should have taken to remedy the problem.

One giant surprise came into play on a move - there was a free-standing corner cabinet in the dining room that the buyer did not want left in the house. When the seller had the cabinet moved, the beautiful hardwood flooring that had been installed by the previous owner didn't extend under the cabinet - something our seller never knew, they had bought the house with the cabinet in place! Of course, the buyer's wanted enough money held out to replace the flooring in the whole room, and of course the company they called quoted a price big enough to build an addition! At this point, the sellers are in a total panic. This unfortunate situation was remedied by a flooring company we rely on to do fair and reasonable work. They stepped in the same day, laid flooring that was a very close match, then lightly stained the whole floor - it came out great, everyone was happy and the final cost? $500! We were lucky here with our connections - this could have potentially cost a lot more and held up the closing for days (if not longer)

On the buyer's side we did a walkthrough prior to closing where the utilities had been turned off. Of course, a walkthrough with a flashlight is a far cry from ideal, but although everything looked fine, we couldn't try appliances, heat, ac, hot water, etc. At closing we asked for a $1,500 escrow to be held for one week, enough time to get the utilities turned back on a do a thorough walkthrough. Good thing we got the money, it cost the seller over $1,400 (he did get back a little bit), as the refrigerator that was less than 2 years old wouldn't get cold and the water wouldn't get hot. He could not have the refrigerator serviced for 10 days (unacceptable), and the hot water tank was aging and it was recommended it be replaced. There is no doubt that had he checked these things out himself and made sure the utilities were on, he could have save himself about $1,000.

So, as a seller - make sure everything is in as good condition and in working order BEFORE the buyer does his walkthrough. If you have touchup paint stored, ASK if the buyer wants it left (it cost one seller $150 at closing because paint cans were left the buyer didn't want and the garage door opener was lost - easily remedied by a trip to the dump and a Home Depot type store). Make sure the utilities are left on and make sure EVERYTHING is gone, from attics, basements, crawl spaces, sheds, garages, all those places where the things we thought were lost are hiding.

As a buyer - if you've chosen a competent realtor, they will know what to look for, they will know how to negotiate in your best interest if there is something amiss. Remember, check EVERYTHING, run all the appliances, run the heat and ac (if possible), plug something into sockets, trip GFCI plugs. Check empty closets, cabinets and crawl spaces for signs of leaking or damage or mold that was not apparent when they were full. Give youself enough time to do a thorough job of it - don't do a quick pass through 1/2 hour prior to settlement, and don't schedule the movers if at all possible the same day as closing - give yourself enough time to right anything that needs righting. Remember our photo finish, the buyer wound up paying for the movers for several hours while they sat around waiting for the sellers to finish cleaning off the walls!

That's it for now, hope this was at least a little enlightening.... remember,

CHECK BACK HERE OFTEN, WE'VE JUST SCRATCHED THE SURFACE!

Your comments, suggestions, gripes, cudos are encourated!

"AS IS" ISN'T ALWAYS AS IS

Well, another interesting happening today - we did a final walkthrough on a house sale prior to closing. This house was purchased completely as is, however, we did have a general inspection contingency. What was missed, even by a competent inspector, was the fact that there was no water meter. The house had been severely damaged by fire and restored, but it looks like they may have restored the plumbing in the basement and never had a new water meter installed! How did this come up? We had called the water company for a final water reading and found out where the meter should have been - no meter. So, at closing there was a hefty escrow taken to assure that the water bills and meter situation will be cleared up before being turned into the buyer's name. You learn new things all the time - don't think I've ever seen an inspector look for meters.
But I am straying from the point of this post - the fact that there was a general inspection in lieu of a normal home inspection contingency and what that differece actually is.
In a nutshell, the difference between a home inspection contingency and a general inspection contingency is that on a home inspection you can do your inspection and present a "laundry" list of items for the seller to repair or negotiate. Here in Maryland, electrical, mechanical and plumbing are "must fix" items on a home inspection. Outside of that, if there are other items found, such as broken windows, structural irregularities, broken or clogged gutters, cracks in the sidewalks, any number of things, you can ask for them to be remedied or ask for a dollar amount credit to take care of them youself. If you buy a home "as is" - typically an estate, a foreclosure, a very low selling price, a foreclosure, or bank owned, you can put a general inspection clause into the contract. This allows for you to bring in a home inspector but does not allow for you to seek repairs - even the "must fix" items as they are also excluded from most general inspection clauses. What it does allow you is an "out" of the contract with no penalty. If the inspection turns up too many items or items of real concern such as structural, you can declare the contract null and void and your earnest money deposit is returned to you.

Here's a little hint - even on an "as is" sale, even with a general inspection, that will not preclude you from presenting an addendum to the contract asking for a reduction in price or that an allowance be made for some repairs - the seller can just say forget it. In reality, if the request is justified or founded, it is in the seller's best interest to make some sort of concession - the house has now been off the market for a time (even if it's only a week), and they have been made aware of defects that they must now, by law, disclose to any new potential buyers. Sort of like being caught between a rock and a hard place

So, just a word to the wise - whether buying or selling - "as is" is not always as is and can potentially create problems!



BE INFORMED AND CHECK BACK HERE OFTEN!