Walkthrough when buying a home

It’s one of the biggest moments of your life… the door of your new home opens, and the previous home owners have left you a disaster. The house is dirty, belongings are left behind, there is a hole in the wall and the yard is a mess. As the new owner, what can you do? And how can this be prevented?

The limited role of the realtor

When something like this happens, however harsh it may sound, you can only hope for the best. In any case, the role of your realtor is extremely limited in issues like this. It is the lawyer’s task to deal with issues after possession. So, the best thing to do is to call your lawyer immediately, explain the situation and send photos for proof.

There is often a period of 15 to 60 days, or even 90 days between waiving your conditions and receiving the key on possession day. Anything can happen to the house in that period of time. In order to receive the keys and take possession of the home, the money must be transferred. If issues come up after you have essentially paid for the house, your lawyer can’t just call the seller’s lawyer and ask for money back for damages. The best your lawyer can do is call the seller’s lawyer and see if s/he can come to any agreement about damages and, perhaps, compensation or reimbursement. As a buyer you can only hope the sellers will be civil about it.

The real estate contract about this issue

If it is just junk in the yard, you will probably have to take your loss and clean that up yourself. There is no clause for junk in the contract, unless it was manually written and negotiated in the contract. But if the seller took out an entire wall or appliances, the situation is a bit different. For bigger issues like this the contract states:

“When the Buyer obtains possession, the Property will be in substantially the same condition as it was in when this Contract was accepted.“

So, it depends on the situation for your lawyer to successfully claim any damages you incurred as a buyer. Either way, if the sellers are not willing to solve the issues and pay for damages, suing them in court is your only option.

Prevent a disaster with a walk-through

A walk-through can prevent issues but is never a guarantee. When you purchase the home, your realtor can add a term (not a condition) to the contract. The term states that you want to inspect the home 24 hours prior to possession. This way the sellers must grant you access to the property. If there is junk left, your realtor can take action by calling the other agent. Hopefully the sellers will assume responsibility in the last minutes before possession. Either way, the lawyer must also be informed of the issues. Even if the issues arise during this final walk-through, the buyer’s lawyer can’t just simply withhold any money. And if lawyers can’t come to any agreement, again, the only option is to sue the seller in court for damages afterwards.

So, a walk-trough can give some peace of mind, but a walk-through are not fool proof either. Remember: the money transfers first; then the buyer receives the keys. And if the seller is not willing to solve the issue before or after key release, suing is your only resort.

If this term is not in the contract, you do not have the right to go into the home prior to the possession date! And the sooner you know of any issues, the more chance there is for your lawyer to solve them.

Negotiating terms in a real estate contract

A buyer can ask for many different things during negotiations. A term is not limited to only a walk-trough. When you are negotiating with the seller and you would like something repaired or cleaned in the home, you can ask your realtor to add a term in the contract. Here are a few examples a realtor can write in the contract as a term:

• Getting the house (or furnace) cleaned by a professional company.
•  State that the sellers must remove junk in the yard.
• Asking for the repair of a cracked window or anything else that needs repair.

Terms like this must contain a hold-back of a certain dollar amount. The amount must be in line with the actual cost. You cannot ask for a $10,000 hold-back for a $1,500 window. (Although you can always ask, the sellers will not agree with this) The hold-back gets released to the seller when the issues are, indeed, remediated or fixed. If not remediated or fixed, the buyer receives the hold back.  Read more about terms and how to write enforceable terms in the contract.

In general, we are quite impressed with how most sellers leave their homes for the new buyers. On many occasions, though, we made sure a term was written into the contract correctly. There was the very rare occasion where the situation did not work out well for the buyer. The sellers left some unwanted items and were not willing to assume responsibility from them. Again, nothing is 100% preventable or guaranteed!

Please note: The above is general information and not considered legal advice. We do our best to write informative articles about real estate in Calgary, Alberta. If you have any questions or concerns about our comments, please feel free to contact us or speak to your legal advisor.