Buyers often see real estate in its best condition. Open houses and private showings often occur only after the seller and their agent have carefully staged the property. Staging is the process through which they attempt to make it as attractive as possible.
They light candles that smell like cookies, remove excess personal property and highlight the best features of the property. In many cases, they may hang signs or move furniture to cover up minor defects as well. Buyers touring the property can easily overlook issues, like a persistent animal odor.
Additionally, a lot can happen between when the buyer makes the offer and when the closing actually occurs. It is customary to perform a final walk-through before signing the closing paperwork. If the buyer notices damage for the first time during that final inspection, is the cancellation of the closing all but inevitable?
Negotiations may be in order
Depending on the nature and extent of the surprise damage to the property, there are many ways for the agents representing buyers or the attorneys assisting them to address damage to the property. They generally need to document the damage during the walk-through and then determine what it may take to repair the damage.
From there, they can propose reasonable solutions to the seller. Solutions could include reducing the purchase price to reflect repair costs, having the sellers pay the repair costs or giving the sellers an opportunity to make the repairs themselves. Frequently, it is possible to negotiate an arrangement that everyone feels is acceptable.
In some cases, the sellers may not even suffer any losses. The damage could be the result of something the moving company did while removing their possessions. There may be insurance policies that can help cover the repair costs.
If the sellers do not offer to address the damage, then the buyers have to make a decision about whether to continue with the transaction or not. If the damage is significant enough, they may need to cancel the closing. In such scenarios, carefully drafted offer documents that include contingencies can be of the utmost importance. Without appropriate contingencies, the sellers might be able to keep some or all of the buyer’s earnest money.
Buyers and sellers alike rely on professionals to have workable solutions for unexpected complications that could affect real estate closings. Frequently, legal guidance can be very important when choosing how to address complications during a six- or seven-figure transaction.