My real estate attorney has suggested that I put an inspection clause in my contract. Meanwhile, a friend who just bought a condo was telling me about her walk-through. I know I need to check for leaks and cracks, but what's the difference between these two terms?
A: Inspections are done by professionals who look for serious structural issues like bad foundations, wiring, or plumbing. A walk-through, on the other hand, comes late in the game, typically just before closing, to make sure that you get what you're paying for.
Typically a contract will state that an apartment or a house is being delivered with x number of kitchens, x number of washer/dryers, x number of refrigerators; a walk-through is to make sure that the seller didn't move anytyhing out after you signed.
Please note that contracts can vary, so before you sign yours, you really want to read it. Often first-time buyers assume that something they saw in the property would come with it and are disappointed when it doesn't. The most common items of contention are window treatments and lighting fixtures, so if you want either or both of those, be sure to write them in.
It is also the standard, at least in my state, that a property be delivered "broom-clean," so a walk-through is to make sure that the seller didn't leave his or her junk lying all over the place. After all, you don't want to pay movers to haul out the seller's old dining table.
Because a walk-through is a last-minute check-up, it's typically done the morning of closing, or perhaps the day before.
The exception is in a new condominium development, where the buyer may have seen a model unit rather than their specific unit. In those cases, a walk-through is often a couple of weeks before closing.
In this case the buyer creates what is known as a punch list, which is a list of missing or broken items to be fixed. (An example might be that the first time you see your unit, you notice that the counter top was chipped while it was being installed.) While every contract is different, this typically happens with new condo units only; if you're buying an older house and the counter top was chipped when you first saw it, the contract will usually state that you're taking the house "as is" and you can't ask for it to be fixed on the walk-through.
Things you should look for on any walk-through are missing or non-working appliances, gaps or holes in the walls or the ceiling, and safety devices -- such as a working carbon monoxide detector and a working smoke detector -- that may be required by state law.
This is a way for the buyer to ascertain the condition of the property and make sure that there are no hidden defects. Depending on whether you're in a buyer or a seller's market, you can then negotiate for these defects to be corrected. (In a really strong seller's market, you as the buyer will find a bunch of defects, and the seller will say, "hey, take the property that way" -- and you will!)
The right to an inspection is generally NOT in a boilerplate contract (again, at least in my state) and must be negotiated. Sometimes a buyer will stick a clause in a contract that the sale is contingent upon a successful inspection. Then the clause is called, you guessed it, an inspection contingency or an inspection clause.
Generally, an inspection is not looking for minor flaws, but rather ascertaining the condition of the property's major systems: Is the foundation cracked? Is the wiring up to code?
You often hire a pro to do this. Most inspectors I've seen are pretty good, but beware of laziness. I just saw a recent inspection report on an Atlanta property where the heating system wasn't checked because it was summer, and the heat wasn't running. I have news for you: If I'm buying a property where I want heat, I'm going to make the seller run the heat for me so I can make sure that it works, summer or winter.
Also make sure to do the correct localized inspections. In California you want to check for termites, and in New Jersey you want to check for buried oil tanks. As I've written before, at this point if I were buying a property, I would pay extra for a meth inspection.
Disagreements often come when a flaw is found: The seller wants to do a very minimal repair, and the buyer wants the moon. For example, a buyer might find a leak in a house's basement -- but the seller might think the solution is a patch repair as opposed to a new $20,000 drainage system.
These things are matters of negotiation for your real estate agents and attorneys. Remember that if everybody involved is just a little bit unhappy, you've probably reached a good compromise.
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