The downside of Pre-closing Walk Through Inspection

As you know,  just prior to close,  most real estate contracts include a clause that allows the buyer to make one last inspection of the property. The main reason for this inspection is to insure the house is still there but most of all,  it is to verify that any repairs that were done,  were completed and done correctly.  And,  if the contract addresses this issue,  it normally states that these repairs need to completed prior to closing

I have several issues with this.

Problem 1:  First,  if you do the inspection too early before close,  the seller will probably not have the work done because the contract allows them until close to finish. If you do it right before close,  and a problem arises or work not right,  then that causes a different probem. The answer is simple.  When you are the buyers agent,  write in the contract that any work done by sellers must be complete prior to walkthru or X days prior to closing.  

Problem 2:   Once a problem is found,  there is frequently more than one way to remedy the problem, in most cases,  the seller is going to try to find the cheapest solution.  So, it is important when you negotiate repairs with Sellers that you are clear on what remedy you want and include that on your addendum asking for the seller to agree. If all you say is Seller to repair chimney,  you might get into a bigger fight on how the seller fixed it

Problem 3:  When you do the walk through and the seller has either done repairs themselves or hired someone, one of the main things buyers agents should do is demand that you get copies of all receipts, warranties and permits, if applicable

Problem 4:  Many of the problems found by home inspectors are very complicated,  such as electrical, foundation, leaks, mold, structural, etc, etc. During the walkthru the Buyer's agent arrives to verify that work is complete. Are you qualified?  Many times you are not.  Can you verify that the plumbing leak under the house has been fixed?  That the structural beam in the attic was repaired property?  I think now.  So, here is what I suggest. Speak to your favorite home inspector and ask if they will provide an additional service for your clients.  Ask them to accompany you on the walkthru to verify that the work is done property. They might charge an additional $100 for this trip, but it is worth it. This is especially important in states where their contract does not require all repairs to be done by a licensed contractor. 

Problem 5:  One of the comments suggest that we can credit the buyer with $ in lieu of the seller making the repairs.  This creates a potential problem.  Too often the estimate is not enough to make the repairs,  so,  what happens then.  Let's say the contract stated that the Seller was going to provide a Section 1 clearance and the estimate was $3000.  But,  when the floors were pulled up for repair,  the cost was really $5000.  So, what controls.  The contract still says the Seller would provide a clearance,  so the Buyer probably has a good chance to come back after the seller in small claims.  Normally the buyer is upset at their agent for allowing them to take credit.  The secret is making an addendum to the contract.  It should be titled,  credit in lieu of repairs.  It should state that the repairs were either PAYMENT IN FULL, NO MATTER WHAT BUYER'S COST TO MAKE REPAIRS or CREDIT TOWARD THE COST OF REPAIR AND SELLER AGREES TO REIMBURSE BUYER FOR ANY ADDITIONAL COSTS,  NOT TO EXCEED 

- x - Dollars.  This also raises a couple of other areas for concern.  First,  will the lender allow credits  (normally they don't because many buyers take the credit, then not make the repairs) and what happens if the buyer wants to upgrade.  Something to think about!