Final Walkthrough vs The Punch List
Nov 04, 2021 brooklyn,brooklyn buyer,brooklyn real estate,buyers,buying process,construction,homeowner,realtor,red hook
When you buy new construction, you’re often buying the final product sight unseen. Sure, you’ve seen a model unit or drawings but the reality needs to be a lot more granular. This doc will take you through what’s called a “punch list,” and why you need it for new construction projects.
What is a Punch List?
A punch list is generated near the end of a construction project & includes all of the tiny details that need to be fixed before a final walkthrough can take place. Basically, it’s the final to-do list for the developer. From outlets to vanity handles and drywall repair to appliance issues, the punch list will keep your expectations top-of-mind and help your developer stay accountable.
Why is a Punch List Important?
This list is important because it (1) signals the near end of a construction project (yay!) and (2) ensures that nothing slips through the cracks (pun semi-intended). For instance, if you had new kitchen appliances installed & some of the fresh paint on the walls got nicked, this list would note those touch-ups before the project can be completed.
How Thorough Does a Punch List Need to Be?
It’s extremely important that the list is as thorough as possible. Inspect every corner & every inch of the new construction and write down everything that you can think of for the developer to fix or correct. Not only will it ensure that your new home is as near perfect as can be, but it will also hold the developer accountable for finishing the work.
RC Tip: Bring a close friend or relative who hasn’t been involved to help you inspect the property. They will bring in a fresh perspective and help you catch those teeny details you might otherwise overlook.
Payment & The Punch List
Depending on your specific agreement, you’ll likely be holding onto at least 10% of the final payment for the closing and after all items are completed.
When is a Punch List Created?
Typically, this list will be created during a “pre-final walkthrough” of the home. You will schedule the pre-final walk through when the building has reached substantial completion and the building is ready to schedule closings. Substantial completion is a term used in the industry to describe whether it is necessary for the developer to come back to initiate any repairs. If a project reaches this stage, then you will schedule closing and they’ll move on to their next project. If not, then there’s still real work they have to complete before you can close and move in.
RC Tip: Consider creating punch-lists throughout the project, especially if you begin to notice that the developer is forgetting items you mention. You’ll be able to get things fixed quicker if you stay on top of the project, instead of waiting until the last minute (we are happy to help with this also).
Here is what to look for and put on your punch list.
Depending on your specific agreement, you’ll likely be holding onto at least 10% of the final payment for the closing and after all items are completed.
What Happens If The Developer Doesn’t Complete My Punch List?
It’s important to stay on top of the project throughout so you don’t (1) annoy the developer and (2) ensure that the things you want done are being completed. But to make sure that the developer doesn’t give you too many problems, deal with provisions surrounding the punch list at contract signing. You could include it as an attachment to the contract or sale, or include language that would hold the developer financially responsible if items aren’t completed.
If things go really south, you could ask the Attorney General to intervene, or see if the board is pursuing any collective action against the sponsor on behalf of unit owners.
Of course, if you’re working with a buyer’s broker (like us 🙂 ) you can expect a helping hand in this stage of the process.
Still have questions? Never hesitate to get in touch!