Once you’re under contract to purchase your investment property, always set up a final “walk-through” of the house either the day before or just prior to going to the closing. Once title passes to you at closing, things can get messier if everything was not in “proper working order” right before the closing.
Once you take title, the onus now falls on you to prove it wasn’t your fault an appliance doesn’t work, or a water pipe leaked, or a radiator doesn’t heat properly. Your attorney is always trying to keep you out of a potential lawsuit – and this becomes a much more difficult undertaking (than, say, delaying a closing) if any problems were to be found after the actual closing.
Fortunately, most pre-closing walk-throughs are quick and painless. But one does hear stories that remind you that the walk-through is a crucial part of the house-buying process.
Horror stories abound…
These walk-throughs are an absolute must, simply because horror stories do exist. One such story involved the purchase of a vacant home. Without the benefit of inspecting the house just prior to closing, the investor walked into the property right after closing, only to find it had been stripped of all light fixtures, shades and curtains – even outlet covers. However, an investor should not do a walk-through hoping to find something to renegotiate the price at closing. This point should be well-taken, since that could obviously create rancor during what is normally a pressure-laden time.
When the contract calls for a house to be left in ’broom clean” condition (a standard term in all real estate contracts), it should be left in exactly that way right before the closing. Especially if the seller owns any pets. It can certainly cost a lot of money to have hardwood floors scraped, especially since pet stains never really come out.
A cautionary tale…
I consider my own pre-closing horror story to be the definitive reason why walk-throughs are paramount. My first house purchase was also a vacant property – and the closing was set to take place in January.
Unfortunately, vacant houses and winter don’t get along too well. Upon opening the front door for my inspection the day before the closing, I walked in on an indoor waterfall: the heat had failed, and a water pipe had burst in an upstairs shower, and the second floor wanted desperately to become the first floor.
Here was a case where renegotiation of the contract was essential. The renegotiation required much time for the house to dry out, contractors to submit their estimates for damage repairs, and the seller and I to agree on a satisfactory price reduction to the property. However, I eventually closed on the house – two months later, however.
You certainly do not want to walk in on a waterfall after the closing. So the pre-close walk-through is an all-important last step in any investment property purchase.
photos courtesy of salelahome,com, britishdeedpolloffice.org.uk, sheep319.com