What to Do If You Find Issues During the Final Walk-Through

The final walk-through is a key step in the home buying process, serving as the buyer’s last opportunity to inspect the property before closing. This inspection allows a buyer to verify that the home remains in the expected condition and that any agreed-upon repairs have been completed. Neglecting this step can lead to unforeseen issues becoming the buyer’s responsibility after the transaction is finalized.

Identifying and Documenting Issues

During the final walk-through, a buyer should inspect the property to identify any discrepancies or new problems. This inspection is not a substitute for a professional home inspection conducted earlier, but rather a verification that the property’s condition has not significantly changed. Buyers should look for new damage, missing fixtures or appliances, or personal belongings of the seller to be removed. Also verify any agreed-upon repairs have been done satisfactorily.

Specific items to check include:
Testing all appliances.
Flushing toilets.
Running faucets to check water pressure and hot water.
Confirming that all lights, electrical outlets, and HVAC systems are functional.
Examining walls, ceilings, and floors for any new damage.
Ensuring that all doors and windows open, close, and lock properly.
Confirming the seller has removed all personal items.
Verifying the home is in “broom clean” condition, meaning free of trash and debris.

Thorough documentation of any issues found is important. This involves taking clear photos and videos of each problem, noting its exact location, a detailed description, and the date of discovery. Bringing a copy of the purchase agreement, the home inspection report, and any repair addendums can help ensure that all agreed-upon items and repairs are verified. This objective evidence will be important when communicating with the seller or their representatives to resolve discrepancies.

Understanding Contractual Provisions

Before addressing any issues discovered during the final walk-through, buyers must understand the specific provisions within their real estate sales contract. Most contracts define the expected condition of the property at closing. Many agreements stipulate the home be delivered in “broom clean” condition, meaning it is free of garbage, refuse, trash, and personal belongings not included in the sale, with floors swept or vacuumed.

Another common contractual provision addresses the “same condition as inspection” clause, implying that the property should be in substantially the same state as when the initial home inspection occurred, allowing for ordinary wear and tear. Contracts also detail how repairs agreed upon in amendments or addendums should be completed and verified. Buyers should review these sections to confirm the seller’s obligations regarding the property’s state, including the functionality of systems and the presence of agreed-upon fixtures.

The contract will also distinguish between minor wear and tear and “material defects” that could significantly impact the property’s value or safety. A material defect is a substantial problem, such as structural issues, significant water damage, or major system failures, that could deter a buyer or affect the home’s worth. Understanding this distinction is important because only material defects or failures to meet contractual obligations warrant action. Real estate contracts often specify deadlines for reporting issues found during the walk-through, making timely communication important.

Communicating and Negotiating Remedies

Once issues are identified and documented, buyers must formally communicate concerns. The initial contact is the buyer’s real estate agent or attorney, who presents documented issues to the seller’s agent or attorney. Communication should always be in writing, such as a formal notice or purchase agreement addendum, adhering to contract deadlines. Prompt and clear communication is important to avoid delays in the closing process.

Several negotiation options are available to resolve issues discovered during the final walk-through. One common remedy is for the buyer to request seller-funded repairs, where the seller completes the necessary work before closing. Alternatively, the buyer might request a closing cost credit, which is a financial concession from the seller applied at closing to cover the estimated cost of repairs. This credit reduces the amount of cash the buyer needs to bring to the closing table. The credit amount is applied against the buyer’s closing costs, not as a direct cash payment to the buyer.

Another option is a price reduction, lowering the overall sale price of the home to account for the necessary repairs. In situations where repairs cannot be completed before closing due to time constraints or external factors like weather, an escrow holdback can be negotiated. This involves a portion of the seller’s funds being held in a neutral third-party escrow account after closing, to be released to the buyer or a contractor once the repairs are satisfactorily completed. This holdback provides an incentive for the seller to ensure the work is done. The specific terms for the release of these funds, including deadlines and verification methods, are outlined in a written escrow holdback agreement.

Finalizing the Outcome

After negotiations conclude and a remedy is agreed upon, the process moves toward finalizing the transaction. If repairs were the chosen solution, the buyer should re-inspect the property to confirm work has been completed to the agreed-upon standard and quality. Receipts for completed repairs should be provided by the seller to document work. If the agreement involved a closing cost credit, this amount will be reflected on the final settlement statement, reducing the buyer’s cash requirement at closing. The credit is not a direct cash payout to the buyer but a reduction in their overall closing expenses.

An escrow holdback, if utilized, will have specific conditions for the release of funds detailed in an addendum to the purchase agreement. Once the agreed-upon work is verified as complete by the buyer or a designated inspector, the escrow agent will disburse the funds as specified. Any unused portion of the holdback funds may revert to the seller.

Unresolved issues or new agreements can sometimes affect the closing timeline, potentially leading to delays or a revised closing date. The buyer ultimately faces a decision point: proceed with the closing despite minor, unresolved issues, or, in severe cases, consider not proceeding with the purchase. Withdrawing from the purchase without a valid contingency outlined in the contract can result in the forfeiture of the earnest money deposit to the seller. However, if the contract includes contingencies such as a home inspection or financing clause, and the buyer withdraws due to issues covered by these contingencies, the earnest money is refundable. The final outcome depends on clear documentation, adherence to contractual terms, and effective communication throughout the process.