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18
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5
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Chris Pappas
  • Fort Howard, MD
5
Votes |
18
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Foreclosure seller contract default, should I leverage this and attempt to renegotiate?

Chris Pappas
  • Fort Howard, MD
Posted Oct 25 2014, 00:05

I have been under contract to purchase a foreclosure for approximately 100 days. Pursuant to the purchase and sale agreement, the seller is now in default because it has not closed within the specified term. 

The property will not be a "grand slam," and I have significant capital set aside for the project. I passed up on multiple deals waiting to close on the subject. Moreover, the seller's agent has not be responsive to my inquiries. I am uncertain when the deal will close. There is roof damage to the subject, and the longer the subject sits the worse condition it will be in once the acquisition is complete. 

I am now able to void the contract. And I am not afraid to walk away from the deal. 

I believe my voiding the contract is highly unfavorable to seller because it will have to reauction the property. Moreover, winter is quickly approaching leading me to think bidders will not be as aggressive in acquiring the property as I was, which means a lower sale price for seller. 

I am thinking to ask seller to reduce the sale price, as the property is incurring damage during this closing period. Based on the above circumstances, I believe I have sufficient leverage to convince seller to reduce the sale price. After all, the property condition is deteriorating and they are likely highly motivated to sell to me rather than reauctioning and possibly losing money.

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