Ask the Registrar: Pre-closing visits
My client is buying a property with a basement apartment, and they would like to bring a potential tenant to the pre-closing visit. How should I handle this situation?
Remember: during pre-closing visits the property still belongs to the seller. As such, the visits are usually open only to the buyer and their real estate salesperson or broker. If anybody other than the buyer plans to attend the pre-closing visit, you should obtain the seller’s permission first. This includes potential tenants, contractors, designers, home inspectors, and even friends or family members.
Make sure your client fully understands the purpose of pre-closing visits and the importance of conducting a thorough examination of the property. Take a minute and explain that a pre-closing visit is an important step towards purchasing a home, and it shouldn’t be treated as a casual walk-through. It also isn’t an opportunity to market the apartment to future tenants, unless there was a provision in the agreement that allowed for this or the seller has provided specific permission to do so.
A pre-closing visit is the buyer’s last chance to verify that: 1) the home is in the condition that it was when the buyer last saw it, 2) the appliances and major systems work properly, 3) the seller didn’t remove any fixtures or other items that were identified as included in the Agreement of Purchase and Sale (APS), and 4) the seller completed any agreed-upon repairs, and fulfilled any other conditions listed in the APS.
Your client may also want to get started on renovations ASAP. Remind them they will have to wait until title is transferred to the buyer (or the transaction has closed) before work can commence. A few years ago, RECO received an unusual complaint from the seller of a vacant house: the buyer had gone ahead and hired a small army of contractors to renovate the home weeks ahead of the closing date. Fortunately, the transaction closed, but if the contractors had damaged the home, or if anyone had been hurt the seller’s insurance may not have covered the damages, and the seller could have initiated a lawsuit against the buyer.
Registrants are expected to personally accompany their clients to all pre-closing visits so they can deal directly with the seller’s representative if any problems are encountered, and to assist their client with performing a meaningful pre-closing inspection.