A lady walked inside my rehab yesterday while I was installing some window casing. She was interested so I gave her the tour. She told me that, " you might have just sold this house". I've heard this throughout my career, being in Marketing & Sales, and didn't take it too seriously. She came back today with her realtor and made an offer.
She wants to structure the deal so that she gives me $100,000 on Friday and close that day. The remainder of the sales price will be in an escrow account until completion. My concern here, are problems creeping up that are not in our soon to be scope of work.
Should I instead ask for a non-refundable deposit, much less than $100,000 and then sign a contract that doesn't close until completion? What's the best way to structure this deal?
I would be nervous to sign over a deed before I was paid in full. If the money is escrowed and she decides that she doesn't like the way the house was finished, the title company will probably not release the money to you until it's settled. I think I would go with plan B of a deposit and close when it's complete as you suggested. Good luck and keep us posted.
Thanks Rob. For sure I would want some type of language in closing that prevented complete deed transfer until all funds were completed; if such a thing exists.
Have you got any more insight on the second option of a non-refunable deposit? What's appropriate, 10%, 5%? Then we would agree on a scope of work and close once it's complete and both parties were satisfied?
I would think that if this buyer wants the house the way that you were going to finish it, you could just take a deposit, finish the house, and close it. If she wants a bunch of changes made, you will probably want to adjust the price accordingly and get a deposit. I would think 5 or 10% would be fine. I would prefer to go that route instead of closing before it's done. After thinking about it, I don't think the first option would be a good deal for anyone except the agent getting the commission. I wouldn't want to go that route as a buyer or as a seller.
Yes, thats a good point, the realtor is pushing to close. I'm going to stay in control of this deal and not commit to anything in a rush.
I'd be worry of an extremely picky (nitpicky) buyer that will come back to you when you are completed and attempt to nickel and dime you for price reductions for any little imperfection (real or not real) that they see.
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