Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votes
I recently sold a renovated house that had an older but operable water heater. In the contract it was asked that all mechanicals were in working order at time of the inspection, in which they were and everything was signed off on saying it was operable. The final inspection and final sign off on the water heater was 3 days before closing. I got an email today (2 weeks after closing) that the water heater wasn't working when the buyer moved in and that they had to replace it. They are now seeking a refund for their purchase. How would you handle this?
Wholesaler · Westminster, CO · Member since 2014 · 309 posts · 104 votes
12y
I would pay for the water heater or maybe offer half. It sounds like you are not responsible, per the contract, but paying for it will say a lot about your character and will only serve to add to your great reputation.
Wholesaler · Westminster, CO · Member since 2014 · 309 posts · 104 votes
12y
I would pay for the water heater or maybe offer half. It sounds like you are not responsible, per the contract, but paying for it will say a lot about your character and will only serve to add to your great reputation.
Investor · Lucas, TX · Member since 2010 · 620 posts · 352 votes
12y
I ran into a similar issue a few years back but it was a bit more complicated and involved termites. The buyers were threatening me with legal action and even though I was in the right - that didn't mean I would necessarily win in court. In the end I paid them $700 to go away.
Your case seems a bit more clear cut. They had performed their own inspection saying that the hot water heater was working and then at some point after that it failed. On the one hand I'd say; touch luck. On the other hand I'd point to karma being a *****. It will be interesting to see how others weigh in.
Durham, NC · Member since 2012 · 498 posts · 48 votes
12y
I had a situation like this years ago but I was the buyer. I bought a home from a doctor and found a problem with the furnace. My agent helped me get the doctor to pay for the repair.
Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votes
12y
Yeah its not necessarily the money since it is not an expensive reimbursement, it's the principle. With these buyers I am sure there is something more to this. I personally think it wasn't fired up and they used this as an excuse to say it wasn't working and to have it replaced and then seek a refund on the back end.
And I guess my next question is when and where does it end? What's to stop them from coming back 3 months later to demand a refund for something else? Or what if a leak comes through the roof a year from now; am I expected to repair that too to avoid small claims court? To me it just seems like a slippery slope. Skilled, licensed individuals inspect these things for a reason and it doesn't seem like much protection from my end if someone can go behind their assessment to demand repairs after closing. I guess I am just blowing off hot air because I will probably pay them off to stay out of my hair but it doesn't quite seem right.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
I just spent $4000 to fix an ice damming issue that came up the day after sale on one of our properties -- it wasn't our fault (this is a typical problem in 60 year old houses), but it caused some water damage and sending the message that you stand behind your work will go a long way towards building a strong reputation amongst buyers agents in your community, and will also foster goodwill with your customers.
So, I'd send them a check with a sincere apology...
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
12y
I would tell them , " I wish you would have let me know right away , My plumber could have taken care of it , he owes me a favor" I wouldnt pay them , like you said a slippery slope , Air Conditioning season is right around the corner .
Contractor · Minneapolis, MN · Member since 2013 · 112 posts · 67 votes
12y
I'd also say I wish you had told me right away. Depending on the age of the heater and what was wrong, it may have been repairable. Having it replaced and then billing the seller shows their lack of character. That said, I'd pay them for the water heater, not the install, and have them sign a document that states everything else is working at the moment, then smile and move on.
Virginia Beach, VA · Member since 2013 · 33 posts · 0 votes
12y
What really gets me about situations like these is, if I was the buyer and that happened to me, I would NEVER dream of asking the seller to pay. These buyers have to know that you're not responsible, yet they ask anyway. If the water heater was brand new, then that would be one thing. But it was an older unit and, since they had an inspection, they had to be aware of that. If the buyer wants a home warranty, then they should buy a home warranty, or at least ask the seller to throw one in when negotiating the purchase price.
I have to say that I'm really on the fence about this. I can certainly see the value in goodwill. Even though rehabbed homes is not an item that you're going to have repeat buyer's for, it might go a long way in the eyes of the buyer's agent who you may either work with again down the road or may spread the word about you. But it really upsets me when people agree to something, but then later expect more than what they agreed to. In my opinion, the buyer's request for you to replace the water essentially unethical since it's outside of your contractual agreement. Buy hey... you gotta do what you gotta do.
The bottom is is that it's a tough call and there are many other variables that would come in to play for me to determine how I'd handle it.
Investor · Lathrop, CA · Member since 2017 · 1 post · 0 votes
8y
When all conditions were met and signed and all pertinent contingencies were released based on the buyer's due diligence, then these documents prove that their investigation were satisfied. But of course, buyers will insist to get the repairs done at your expense. Half/half share of expense will be a reasonable solution in this case. For future transaction, as an investor, there is no guaranty that the house's system components and appliances that we are selling will work after the close of escrow. Surely we cut corners to maximize our proceeds but we don't want to be placed in a situation where future expensive lawsuits will come around to hunt us. In order to avoid this incident, I normally leverage with a home warranty policy. Offering a one-year home warranty policy that will take care of the repair or replacement of many major home system components and appliances that typically breakdown over time due to normal wear and tear. By doing so, investors make buyers happy and investors will have a peace of mind with a valuable and decent transaction.