Seller Can’t Deliver Vacant — WWYD?

[Brian Cronin]

Looking for advice here. (Cross posted for visibility) 

We’re under agreement on a 2-family in Beverly, MA marketed as an “owner-occupied opportunity" with both units being TAW. We’re using owner-occupied financing, so vacant delivery at closing (5/19) was required and agreed to by the seller in a signed offer.

After going under contract, we found out the tenants are NOT TAW — they have leases through October, seller has no signed termination, and tenants won’t commit to leaving before their lease, but they're "looking".

We’ve already spent:

 -$1,100 inspection, $600 appraisal, $1,000 deposit, plus time with contractors, lender, attorney, etc.

Seller’s response has basically been:

• -No clear relocation plan
• -Suggested terminating the deal, with refund of deposit
• -They even went as far as to change the listing to “future owner-occupied opportunity”.

Our Counter

We’re trying to salvage it:

• -Extend closing to 6/19
• -$5K price reduction to account for our extended rental costs
• -Keep $15K knob & tube credit
• -Require weekly updates
• -If not delivered vacant → we walk + get reimbursed (deposit, inspection, appraisal)

Questions

• Would you keep pushing on this or walk now?
• Is this too risky given MA tenant laws?
• Would you demand stronger protections (escrow holdback, bigger price cut, seller-funded cash-for-keys)?

Feels like the seller agreed to something they can’t actually deliver and have been unresponsive and sketchy to say the least. If it wasn't a good deal and a well maintained property, we would have walked already.

Curious how others would handle this.

Brian 

[Evan Polaski]

@Brian Cronin, first: why did you post this 5 times under separate forums?

To answer your questions:
"Would I keep pushing" - it sounds like you need a place to live, so worth fighting a bit for it, but not losing sleep over it.  If I were seller, and you were one of many offers I got, I would tell you to pound dirt and take me to small claims for $1,700 versus just giving you $5k.  But, I don't know the seller's motivations.  If they have no real interest besides you, then you have a better negotiating position, and might get more.  It is all a negotiation.

"Is it too risky" - I am not versed in MA laws, but I would make sure that a condition to close is that owner provides tenant signed terminations or something of the like that, if tenants try to come back on you, you have signed documentation that they knowingly terminated.

"Demand stronger protections" - noted above. 

At the end of the day, since the listing misrepresented the current status of the property, you likely have a strong case to recoup damages from seller.  I would screen capture and make sure you have verifiable documentation of how the property was represented at your time of entering contract, to easily prove your case to a small claims judge, if it gets that far.  Since they changed the listing, I would try wayback machine or something of the like to try to get the original language posted.