Buying a home is an exciting yet complex process that involves multiple steps before the final closing. One essential step is the pre-closing visit, also known as a final walkthrough. This visit ensures that the home is in the agreed-upon condition and that no unexpected issues have arisen since the initial purchase agreement.
Why am I writing about this? Well, I have taken several courses on Real Estate law (I just finished one) and many many Realtors I run into don't understand some fundamentals on Real Estate contracts - so they don't/can't explain them to clients. Realistically buying a property can feel like a fire hose of information. So this article covers in detail the importance of pre-closing visits.
Your legal right in Ontario
A pre-closing visit can help buyers avoid last-minute surprises and give them peace of mind before taking possession. Additionally, even if not explicitly stated in the contract, Ontario case law—specifically Harkness v. Cooney —affirms that buyers have a right to a final walkthrough. In this post, we’ll explore the legal framework behind pre-closing visits, what buyers should check, and common "what if" scenarios that could arise.
See below for a more detailed description of Harkness vs. Cooney.
Have you heard about Equitable Conversion?
One of the fundamental legal principles related to real estate transactions is called equitable conversion. In essence, once a buyer and seller sign a binding contract for the sale of a home, the buyer becomes the equitable owner, while the seller retains legal title until the closing is finalized.
Why is this important?
In the simplest terms, the seller holds the property in trust until closing. As such, it’s their responsibility to keep the property in the same condition as it was when the contract was signed, unless the contract reads otherwise.
A pre-closing visit gives the buyer the opportunity to inspect the property and ensure it remains in the agreed-upon condition. If significant issues arise, buyers may have legal grounds to delay closing or request repairs or compensation.
When should you do you do the final walkthrough?
I like to do it 2-3 days before closing. That way any problems can be dealt with without the pressure of handling in on the closing day.
What Buyers Should Check During a Pre-Closing Visit
A pre-closing visit is the buyer’s final opportunity to confirm that the home is in the expected condition before closing. Here’s a checklist of key areas to inspect:
General Condition of the Property
- Ensure the home is in the same condition as when you made the offer.
- Check for any new damage (e.g., walls, ceilings, flooring).
- Look for signs of leaks, mold, or pest infestations.
Check for Repairs and Agreed-Upon Fixes
- Verify that any repairs negotiated in the purchase agreement have been completed.
- Review receipts or warranties for any repair work done by the seller if you have requested them in the offer.
Appliances and Fixtures
- Test all included appliances (stove, refrigerator, dishwasher, washer, dryer, etc.).
- Ensure all light fixtures, ceiling fans, and electrical outlets are functional.
- Confirm that any agreed-upon appliances and fixtures are still present; and they are the same ones you saw when you signed the contract.
- if there is not enough time to run the dishwasher and washer, check them immediately when you get the keys, before the end of the day of closing.
Plumbing and Water Systems
- Turn on all faucets and check for water pressure and leaks.
- Flush toilets and run showers to ensure proper drainage.
- Inspect the hot water heater for functionality.
HVAC
- Test the HVAC system to ensure heating and cooling are working properly
Doors and Windows
- Open and close all doors and windows to ensure they function properly.
- Look for broken locks, cracked windows, damaged or missing screens.
Exterior and Landscaping
- Inspect the roof, gutters, and siding for visible damage.
- Ensure that agreed-upon landscaping or outdoor structures remain intact & items have been removed from any outbuildings
Garage and Storage Areas
- Verify garage door functionality
- Ensure storage areas and sheds are empty and in good condition.
Check for Items the Seller Should Have Removed
- Ensure all personal items and debris have been removed.
What If Scenarios: Addressing Common Pre-Closing Issues
1. What if the seller hasn’t moved out yet (or have, but have left a lot of stuff behind)?
If the seller or other party like a tenant is still occupying the home, and your contract includes vacant possession, contact your lawyer right away. Options can include a short contract extension, however However, if they refuse to vacate the contract may be breached.
If the home is not in ‘broom swept condition’, document it with photos and notify your real estate agent and lawyer. A reasonable solution would be a holdback on closing funds for you to dispose of the items and clean the property if the seller is unwilling or unable to do so.
2. What if there’s new damage to the property?
If you discover damage that wasn’t present during previous visits, document it with photos and notify your real estate agent and lawyer. Depending on the severity, you may request repairs, a price reduction, or a holdback on closing funds.
3. What if agreed-upon repairs weren’t completed?
If the seller failed to make promised repairs, options would be negotiate for compensation to complete the repairs yourself, delay closing until the work is done. In some cases, funds can be held in trust until repairs are completed.
4. What if the appliances or fixtures are missing?
If appliances or fixtures included in the purchase agreement are missing, or are different than the ones you saw when you went under contract, notify your lawyer & Realtor immediately. Remedies may include compensation or require the seller to replace the missing items before closing.
5. What if I have used up all my purchaser visits long before closing?
In Ontario, the right to a pre-closing visit is not always explicitly included in real estate contracts, leading to potential disputes. However, the Ontario case Harkness v. Cooney established that a final walkthrough is a reasonable expectation for buyers, even if it is not contractually stipulated.
In this case, the court ruled in favor of the buyer’s right to inspect the property before closing to ensure it was in the agreed-upon condition. This decision underscores the importance of a pre-closing visit and reinforces the buyer’s ability to verify the property’s status before transferring funds and assuming ownership.
Final Thoughts
A pre-closing visit is a critical step that helps ensure a smooth transition to homeownership. By understanding the legal principles behind equitable conversion and the case law supporting final walkthroughs, buyers can confidently protect their interests. Taking the time to inspect key areas of the home and addressing any issues before closing can save time, money, and stress in the long run.
If you’re purchasing a home, make sure to schedule a pre-closing visit and work with your real estate agent and lawyer to resolve any concerns. By being proactive, you’ll ensure that your dream home is truly ready for move-in day.
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