Between the time that you have an accepted offer on a property and the closing date arrives, things can change. Unfortunately, buyers sometimes find a surprise when closing time comes and there has been some sort of damage or change to the property. This can be especially of concern when buying a tenanted property with vacant possession. If the tenants and previous owner were not on good terms, or the tenant is not happy to be leaving the property, the risk of damage to the property before closing is higher.
Fortunately, there are a few proactive steps that you and your Realtor can take to protect you in these situations.
1. Insert protective clauses in your offer.
This can include a clauses that speak to the condition of the property and its contents. In the case that any damages or alterations occur, the clause can require the seller to restore the property to its original condition, or compensate the buyer for any necessary repairs.
Include a clause allowing you to walk through the property prior to closing. I include this in every offer. It is a good idea to walk through the property the day before closing to inspect the property for potential damage before meeting with your lawyer for to sign the documents.
2. Take pictures of the property and the appliances, and document serial numbers.
If there are appliances included in the sale, you can take photos of the appliances and document their serial numbers. This prevents the sellers from down-grading the appliances before closing.
3. Have your lawyer negotiate a holdback.
If you have reason to suspect that the home won't be left in good condition, you can have your lawyer negotiate a holdback of funds on closing. For example, when property is transferred, there can be a holdback of $1000.00, which will get released to the seller once the buyer has inspected the property and insured that it is in good condition.
A holdback can also be used if you inspect the property the day before closing and there is some kind of damage. Rather than pushing the closing date back to deal with the issue, the closing can still go forward with a holdback of funds until the seller remedies the situation.
Ultimately, it is the seller's responsibility to maintain the condition of the property until the time of closing, and these proactive steps will help you avoid and surprises.