Standard for Buyer’s Walk-Through Inspection
“I know it when I see it.”
–United States Supreme Court Justice Potter Stewart’s threshold test for defining obscenity.
What’s fair game for raising issues during the Buyer’s walk-through inspection? (typically, conducted within 48 hours of closing).
At least in Minnesota, any changes to the home since the Buyer’s inspection that substantially alter its condition.
In (and Out) of Bounds; The Golden Rule
In practice, such major problems as flooded basements, roof damage, broken furnaces or central a/c units are all fair game (and things you’d certainly expect a Seller — at least one who was still living in the home — to be aware of and already addressing).
Out-of-bounds: minor, handyman-type issues and — while upsetting to many Buyers — less than pristine fridges, floors and toilets.
While the standard is ill-defined, my advice to departing Sellers is to follow The Golden Rule: leave the home in the same condition you would expect if you were the Buyer.
P.S.: short sales and foreclosures are special cases, where the Seller’s willingness and/or ability to make last-minute repairs — or reduce the sales price in lieu thereof — may be limited.
*Accountants’ term for “substantially the same condition” is “materiality.”
So, a $100,000 issue for a $100 million corporation is most certainly not material (at least for its management, auditor, and investors).
A $5 million item clearly would be.
