Top 5 Surprises on Closing Day and What You Can Do About Them

Closing day in a real estate transaction can bring about surprises. While it's essential for both buyers and sellers to carefully review and address all details in the purchase agreement, unexpected issues can still arise. Here are some common surprises on closing day and what you can do about them.

1) Property Condition Changes

If the property's condition changes between the offer acceptance and closing (e.g., damage from storms, vandalism, or accidents), it can be a surprise for both parties. The seller is responsible for returning the property to the condition it was in at the time of offer acceptance.  

SELLER Advice: Keep insurance on your property until midnight on closing day. Make any insurance claims required to restore property condition as soon as possible and notify your REALTOR(R) and lawyer immediately. They will work with the buying party to help keep the purchase moving forward. 

BUYER Advice: Closing day may need to adjust to accommodate repairs. Have a contingency plan in place for where you can live while waiting for repairs to finish or if you're able to take possession on time, work with your lawyer to ensure restoration still occurs post-closing day. Activate your insurance for the property at 00:01 on closing day.

2) Appliance or System Failures:

Home appliances or systems (HVAC, water heater, etc.) may unexpectedly fail between the offer acceptance and closing, potentially leading to unexpected costs for the seller or last-minute negotiations. 

SELLER Advice: Notify your REALTOR(R) and lawyer immediately and be prepared to compensate the buyer. You may need to replace the failed appliance or system with a new one having the same or better features or provide financial compensation. Unless this is a critical system failure (i.e., a furnace in winter), take action only after hearing from your REALTOR(R) or lawyer with how the buyer wants to proceed. 

BUYER Advice: In some cases, you may have the ability to approve what is installed and can definitely ask for receipts to ensure installation was done by a professional who will stand behind their work. You may also have the option to upgrade the appliance or system and inject some of their own cash into the replacement to make that upgrade happen. Work with your REALTOR(R) and your lawyer to quickly come to the best solution for all.  

3) Seller's Failure to Vacate

Seller may not have fully moved out by closing day, causing logistical challenges and potential delays for the buyer.

SELLER Advice: Start your move out process long before closing day by purging unwanted items and packing the rest so you're ready to go on moving day. Plan your moving day to occur no later than 2-3 days before closing day. This will give you some wiggle room to resolve any issues that may arise with your move without impacting closing day. If unforeseen circumstances arise, notify your REALTOR(R) and your lawyer. Be prepared to compensate the buyer for missing the closing day deadline should it occur. 

BUYER Advice: At the time of making your purchase offer, add a clause to the agreement asking for a walkthrough on the property 24 hours in advance of possession by you and your REALTOR(R). Use this time to identify any of the surprises discussed here and notify your lawyer immediately if any are found. Cancel or reschedule your mover and activate your contingency plan for where you will live until such time as the seller does vacate.   

4) Unwanted Items Left Behind: 

Sellers sometimes think they're doing the buyer a favour by leaving behind items like leftover renovation materials (i.e., tile, flooring), unused paint, furniture items that were too large to remove from the premises, etc. 

SELLER Advice: To leave something behind that was not in the purchase offer, contact your REALTOR(R) well in advance of closing day. Your REALTOR(R) will contact the buyer's REALTOR(R) to find out if the buyer is interested in having these items. If the buyer wants them, you win! If they don't, then you will still need to remove and dispose of them before closing day.   

BUYER Advice: sometimes items that fit into this category are obvious when you first view a property. If this is the case, at the time of making your purchase offer, have these items specifically written into the agreement as excludes. If you notice these items are still present during your 24-hour walkthrough (which you also thought ahead to add to your purchase offer), then let your lawyer know these items are still on the premises and there may be an issue on closing day. If having these items removed is a showstopper to taking possession for you, be prepared to reschedule your mover and activate your contingency plan for where you will live until these items are removed.   

5) Wanted Items are Missing:

Sometimes, item(s) believed to be included are not documented in the purchase offer and sometimes the seller makes a mistake and takes the item(s) with them. 

SELLER Advice: Make sure everything you want left behind is clearly documented in the purchase offer before you sign it.  If this means you have to add the item to the buyer's purchase offer, make sure these items are also initialed. 4-7 days prior to move out, review the purchase offer to clarify what goes and what stays. If you accidentally take something with you that is documented as staying in the agreement, rectify the situation promptly and amicably with the buyer through your lawyer. To take something with you that was supposed to stay behind as per the purchase offer, contact your lawyer who will work with the buyer's lawyer to see if this is possible. Whether possible or not, be prepared to compensate the buyer for taking the item with you.

BUYER Advice: Take a list of the items to be included and excluded with you during your 24-hour walkthrough (which you thought ahead to add to your purchase offer, right?) Document what you find and if there are any discrepancies, communicate them to your lawyer in writing immediately. If the missing item(s) are a showstopper for you taking possession, then cancel or reschedule your mover and activate your contingency plan for where you will live until resolution is reached. 

To minimize surprises, it's crucial for both parties to maintain clear communication throughout the transaction, conduct thorough inspections, and address any potential issues promptly. Working with experienced real estate professionals, including agents, inspectors, and lawyers, can also help anticipate and resolve unexpected challenges on closing day. 

Are you a buyer or seller with a closing surprise story you experienced?  Would love to hear it in the comments below.  

Disclaimer: I am a REALTOR(R), not a lawyer. Advice varies from country to country and region to region. This advice is tailored specifically to those selling and buying residential real estate in Central Alberta, Canada.