A walk through is an opportunity for a buyer to walk through their brand new home just prior to closing so they can do a final check to see if their home builder completed construction of the home according to their contract and the architectural plans. I wanted to write about the walk through because too many buyers and buyer’s agents are confusing the walk through with the normal contingencies of buying an existing home.
The Walk Through
The phrase “walk through” only applies to brand new construction, not existing home sales. That means there is no such thing as a walk through if you are buying an existing home. When the phrase is used by a real estate agent representing a buyer, it creates confusion for a seller who is wondering what the heck a walk through is for an existing home. Let’s look at what a buyer is really thinking about.
Walk Through for a Buyer
There is no “walk through” language in the purchase and sale agreement, nor is there any walk through language in any addendum. Those contracts do provide a buyer with the right to do some due diligence. For example, there is a Home Inspection Addendum, and that is the buyer’s opportunity to have the home examined to see if there are serious problems that need to be addressed. There is a Septic Inspection Addendum, which similarly gives the buyer the right to approve or disapprove the septic report. There is also a Well Inspection Addendum, and again a buyer can require repair work or terminate the transaction based on the well report.
A buyer has other options, depending on the addendums attached, such as the right to do a feasibility study, a neighborhood study, a title report review, and so on. Once the buyer complies with his contract options, the contract he had drafted, and after the buyer has used his contract options, he then either terminates the transaction under the contract terms, or he moves forward to closing.
That means there is no walk through. There’s no such thing for an existing home. But if you have a brand new home built, you are entitled to a walk through prior to closing. Now that you know as a buyer that “walk through” is the wrong legal phrase when you buy an existing home, tell your buyer’s agent. Unless, of course, you hire me to be your buyer’s agent. Wait, that’s a great idea, don’t you think?
Last Updated on September 6, 2019 by Chuck Marunde
I received a very thought provoking email from a reader, and it’s so good, I want to include it here anonymously with my response below.
Dear Mr. Marunde,
I read your article on a walk-through being for new construction only. My husband and I just retired and bought our 5th home. Two have been new construction and the other 3 were existing home sales. I think a walk-through is important in any home purchase. Our first home purchase was in 1978. The seller left a pile of trash in the basement after moving out. How does a buyer guarantee that the seller has left the appliances that were specified in the sales contract unless they do a walk-through? Movers have been known to nick walls when moving out furniture. I would want to make sure that the home was not damaged in any way.
A careful buyer will ask for a walk-through prior to closing and after the seller has moved out to assure themselves that everything is in order. What are your thoughts on this?
I understand your point entirely, but when you walk through a home prior to closing, it is not legally called a “walk through” for existing homes. There is NOTHING in your standard purchase and sale agreement that uses the phrase “walk through” or a similar concept, either in the main agreement, nor in any addendum. That means you have no contract right and no legal right to terminate the agreement if the seller does any of the things you mention in your email. As I pointed out in my article there are other addendums that address your contract rights as a buyer (inspections of various kinds), but a walk through just before closing is not one of them.
Again, the only legal right to a walk through is new construction, and that’s in the contract. Based on existing contracts used in the state of Washington and all the forms used by Washington Realtors through the Northwest MLS, if you did what you call a walk through the day before closing and the seller left garbage or took an appliance, and if you said you refused to close the transaction the next day on the regularly scheduled closing date, you would be in breach of your purchase contract, and the seller could keep your earnest money.
I’m not saying this is good, or that it is fair, but it is the law and has been for decades. Of course, a seller would be stupid to risk the closing like that. I’ve never seen a seller in this area do such a thing, but anything is possible. The sellers in the Sequim area tend to be wonderful retirees.
Your objection is a good one, but you just don’t have the contract right or the legal right under Washington law to refuse to close even if you do a walk through on an existing home purchase.
Now, you could create new language in a blank addendum that gives you such a right. Believe it or not, no one has ever done that to my knowledge, but you could. You’d have to word it correctly to include the exact rights and responsibilities of buyer and seller, and you would have to include the legal remedy the buyer would have if the seller breached, and you would have to spell out precisely what those breaches would be, presumably a long laundry list of things. You would also want to include what happens if the buyer has a loan interest rate locked in and suddenly that loan won’t close if the closing date is to be extended (which has happened). Who would pay the additional costs, if there are additional costs associated with the loan for additional interest or fees, or a loan lock extension fee? The seller is not likely to agree to pay that, and I assume you would say it is the seller’s breach, so you shouldn’t have to pay it either. All that would be true and logical, but it does not solve what could turn into a nightmare scenario, especially for a buyer. You could hire an attorney to sue the seller, but then your attorney would probably want a retainer of at least $5,000, and maybe more. What if the seller took a refrigerator worth $600? Would it be worth it to go through a nightmare and pay an attorney thousands of dollars and not close your purchase? Now you’re in litigation for who knows how long, and you didn’t close on your home.
Sometimes the remedy is worse than the breach. Maybe that’s why attorneys and the real estate profession did not create an addendum to create a right for a buyer to do a “walk through” on existing home purchases.
My daughter once told me her ankle was sore from a slight sprain, and I volunteered to help her make the pain go away. Curious, she said, “how daddy?” I got a hammer out of my kitchen drawer, and her eyes got real big. I said, “No problem, honey, put your hand on the table, and after I hit your thumb with this hammer, you won’t feel the pain in your ankle at all.” Needless to say, she chose to live with her ankle discomfort.
Anyway, I learned as a lawyer of 20 years that not all problems can be solved easily. Sometimes the solution is worse than the problem.