Virginia is a caveat emptor state. 

That's Latin for "buyer beware."  For one reason or another, lawyers, Realtors, and the Catholic Church manage to keep the almost dead language on permanent life support.

Thus, when purchasing a home in Northern Virginia, it is very important to understand that there are certain disclosures and disclaimers that are made by the seller.  It is crucial to be aware of certain protections that are offered by the Regional Sales Contract. 

The mightiest of these protections is Paragraph 7 of the Regional Sales Contract.  Paragraph 7 is so important that I read it verbatim at our initial meeting to all of my clients whether they are buyers or sellers.  Last night while meeting with a new client, I didn't have the contract in front of me, but I was able to recite Paragraph 7 verbatim from memory!

Sitting near the bottom of Page 2 of 10 and titled "EQUIPMENT, MAINTENANCE AND CONDITION," Paragraph 7 appears rather innocent and benign.  But in reality Paragraph 7's five sentences may very well be the most important protections offered to any Northern Virginia homebuyer.

Here then is the exact language of Paragraph 7:

    "Purchaser accepts the Property in the condition as of the Contract Date except as otherwise provided herein.  Seller warrants that, except as otherwise provided, the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required), will be in normal working order as of the Possession Date.  Seller will deliver the Property in substantially the same condition as on the Contract Date and broom clean with all trash and debris removed.  Purchaser and Seller will not hold the Broker liable for any breach of this paragraph.  Seller will have all utilities in service through Settlement or as otherwise agreed."

That's a pretty hefty chunk of meat we just bit off there, isn't it?

Here's an explanation:

Most sellers in Virginia sign a form called the Residential Property Disclaimer Statement.  This form states that the owner makes "no representations or warranties as to the condition of the real property or any improvements thereon... except as otherwise provided in the real estate purchase contract."

Well, the except as otherwise provided refers to Paragraph 7!

The Seller IS warranting that the major systems and the major appliances in the home will be in normal working order. 

What is normal working order?  It means that the air conditioning system blows cold air, the dishwasher washes your dirty dishes, the refrigerator keeps the orange juice cold, and the light switches all work.  Does it mean there can't be any scratches on the side of the stove or sink?  NO!  What about an older water heater?  Well as long as it works properly.  Paragraph 7 does not ensure perfect working order -- just normal working order.

These issues are called walk-through items.  A home inspector will star these items on his home inspection report and tell you that they are walk-through Paragraph 7 items that the seller must repair prior to settlement.  These are separate from any other inspection items that the inspector may find.

If these items are not found to be in normal working order at the time of settlement, the settlement agent may keep money from the transaction in escrow until both parties sign off on any necessary repairs.

A walkthrough is essential to determine that the home is in the same (or repaired and better condition) than it was as of the date of contract.  Typically a walkthrough to check for repair of Paragraph 7 items will be held shortly before the settlement. 

For more details about settlement, please read my article What to Expect at the Closing Table in Northern Virginia

Make sure you read, re-read, and understand the Mighty Paragraph 7 -- it will give you more peace of mind when purchasing a home in Northern Virginia and ensure that you are not taking a gamble on the condition of the property.