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Should you delay the closing over new damage to the property?

by | Oct 17, 2021 | Real Estate Practice, Settlement Services

The price that you offered for your new home likely came from your understanding of the property’s value after looking it over closely. You likely looked at the home and reviewed the seller’s disclosure to decide what an appropriate price for the property was.

Unfortunately, it may not stay in that same condition until you take possession of it. Vacant properties are at high risk of vandalism or damage due to squatters. Owner-occupied properties could wind up severely damaged when an owner tries to move out of the home. 

Many buyers will do a walk-through immediately prior to the closing to verify the condition of the property. What do you do if you discover substantial damage to the property that was not there previously? Should you delay your closing over the damage?

The more expensive the repair, the more you may need to negotiate

If the seller or their movers caused the damage to the property, then they have clear fault for the diminished value of the property. There may be insurance to cover the repairs, or the seller may agree to pay the costs out of pocket to move forward with the closing. If there were criminal acts like vandalism, then insurance might cover the cost of repairing the property. 

Reaching out to your real estate agent and immediately beginning negotiations with the seller is likely necessary. You probably won’t want to delay the closing and risk losing your rate over a $500 repair, like busted drywall and a broken window. However, severe damage like removed pipes and wiring or other issues that cost thousands of dollars to address may require that you delay or even cancel the transaction, especially if the seller won’t cover those costs. 

Protecting yourself while purchasing residential real estate often requires carefully-crafted documents and an understanding of your rights as a buyer.