Good morning! Since today is closing day for two of our sellers and one of our buyers, I thought I’d take a minute to discuss the pre-closing inspection.
Huh? What’s a pre-closing inspection? (And didn’t you already have one done as part of the buyer’s conditions?)
Not to be confused with a home inspection, which is usually performed by a certified inspector, the final walk-through of a home is typically completed by the buyer’s agent and his or her buyers. During COVID, it’s sometimes completed by just the buyer’s agent. It usually takes about 15-20 minutes and we check the property to confirm it’s in satisfactory and acceptable condition as per the terms of the Agreement of Purchase and Sale.
For example, in addition to ensuring that the property is clean and vacant, we make sure that any included appliances are present and operational, the hot and cold water are working, sinks are draining, toilets flush and any remotes for garage doors, heat pumps etc. are there. You get the idea.
Essentially, we double-check the contract to verify that all the seller’s requirements have been completed.
If there’s an issue – like maybe walls have been damaged by movers or the oil or propane hasn’t been topped up. In this case, the buyer’s realtor would contact the seller’s realtor to advise of the problem, and the legal team from both sides starts to sort it out. There could be a holdback or a price reduction. (A holdback is a monetary amount, set aside from the sale proceeds of the property, which is not released to the seller until the seller has completed certain outstanding contractual obligations.)
If the pre-close goes well, the buyer’s agent notifies both the seller’s agent and the buyer’s lawyer that the property has been accepted, and the transfer of funds gets underway.
Once the lawyers confirm that the money has been transferred, only then do the buyers get the keys! And heads up people! This could take a few hours and sometimes all day. (So if you had visions of moving in on closing day – you might want to slow your roll and adjust your plans. Your best bet is always to plan to move in the day after closing day.)
Until next time…