Pitfalls of the Final Walkthrough: When Issues Arise

I recently worked with clients to purchase a condo in Waikoloa Colony Villas, located within the Waikoloa Beach Resort. Upon exiting the condo after running down our final walkthrough checklist, I noticed that the owner’s car hadn’t been moved. I looked at my clients and said, “I don’t recommend signing the final walkthrough contingency until the car has been moved.”

If my clients signed off on the final walkthrough, they would potentially be stuck with this car in one of their designated parking spaces.

During this incident, my clients and I went down all possible avenues in case they indeed were stuck with the car. Could a tow company remove the car? Would the homeowners’ association be liable for the car, and would they move it? How do you get rid of a car without the registration? Did the buyers, my clients, have any recourse to make the seller move the car? Could my clients cancel escrow due to final walkthrough issues?

Before I answer all those questions, I feel it’s important to understand what a final walkthrough is and why it matters.

Why a Final Walkthrough Is Important

The final walkthrough is your opportunity to ensure that everything in the house is the same as it was the last time you saw it, that nothing significant has changed or deteriorated, and the house is in the condition in which you agreed to buy it. What you see is what you get, so this is the main reason why a final walkthrough is so important.

Typically, and per your purchase contract, the final walkthrough is scheduled for five days prior to the close of escrow. It’s your right to inspect the property before you officially take ownership.

What to Bring to the Final Walkthrough

You’ll want to bring along your purchase contract and/or counteroffer(s). This document specifies everything that should be in the house when you buy it such as appliances, fixtures, and so forth. It also specifies what shouldn’t be left behind.

Also, bring the inspection summary. This list provides a handy reminder of everything that should have been done. This can serve as a quick final walkthrough checklist to make sure things have been fixed as agreed.

What to Do During a Final Walkthrough

My own final walkthrough checklist includes the following considerations:

• Has all of the seller’s personal property been removed?
• Has the home been cleaned in accordance with the contract?
• Did the walls or doorframes get damaged when the owner was moving out?
• Are the agreed-upon appliances still present?
• Is there a vehicle rotting in the driveway?
• Are all the repairs the seller agreed to after the home inspection completed?

Now that you understand why a final walkthrough is important, let’s go back to the incident of the parked car.

So…were my clients stuck with the car?

I did speak with a local tow company, and they will not move cars on private property without a pink slip. I also spoke with Waikoloa Colony Villas’ property manager, and he said in all his years, he has never had to tow a car. The association would have to pay for it, so they prefer to give out warnings and fines to owners who are in violation.

My clients had spent the last 40 days in escrow and wanted the condo, so they did not want to cancel escrow. I notified the seller’s agent and advised that my clients would not sign off on the final walkthrough because of the car being present, and days later, after many rounds of emails between agents, I found out the car did not run!

At that same time, I got a call from the escrow company asking if the buyers were ready to close. This was three days before closing and the day before, escrow sends all the closing documents to Oahu to finalize. They told me that once the paperwork is sent to Oahu, it is extremely hard to cancel the closing.

I took a deep breath and called the listing agent, to which I got no response. I took another deep breath and called the buyers, my clients. No response.

I needed to make an executive decision at that time for the safety of my clients: I called the escrow company and told them to hold escrow until the car was moved. This all happened just before the close of business on December 23^rd, so you can imagine the chaos of it all. I knew their office would be closing for the holidays at noon the next day, so there was no time to waste, and I didn’t want my clients to get stuck with this broken-down vehicle.

In the end, escrow was only held up by a day, amazingly! The car was moved, and all parties were happy. It could have been much worse and I’m very glad for my clients it was not. They found out why a final walkthrough is important and as an agent, it reinforced how things can change in an instant even when it seems that all is going smoothly. Having a good agent in your corner can make or break your closing, especially if final walkthrough issues arise.

With aloha,
Leeana