Failed sewer scope, should we walk?
Rental Property Investor · Colorado Springs, CO · Member since 2014 · 60 posts · 30 votes
Hi folks, we are into our second potential deal that might blow up.
My question is should we walk away from this deal? We have had the sewer scoped twice and found an offset both times, and we are asking the seller to repair prior to closing but they have declined fixing it, saying they've never had an issue with it. The property is in an older part of Colorado Srpings with mature trees and the roots have breached the pipe creating a hole. The estimated cost is between $3,500-$5,000. Everything else on the property is in good repair. We have until tomorrow to decide. What are your thoughts.
Thanks
I've done three of these.
1) About 70' from house to edge of street. $4000
2) About 80' from house to city tap in alley $4000
3) About 70' from house to city tap in alley $4800 - This one was quite deep
Last two with the same company:
@Andrew Emery I agree with @Account Closed here. This is an opportunity for leverage not so much a time to ride on principal. I would find the sewer company with the largest yellow pages ad and get a written quote from them to replace the line from the house to the main, including replacement of the tee at the main. I would then ask for that amount off the purchase price plus 20% for "contingency". I would also remind their agent that they have a fiduciary duty to disclose this known defect even if the seller decides to hide it. In fact, they are risking their license if they don't disclose. You might make it a point to discuss the sewer line issues with the neighbors and be sure that the listing agent and seller know that you have done this.
Usually people don't have the funds on hand to deal with these issues.
If the seller fails to disclose to the new buyer then the new buyer can sue them and the seller should know that.
If I were advising the seller. I would have the seller disclose the condition of the sewer line in the property disclosure and make sure that all buyers got that before submitting an offer. Then after the inspection remind them that it was disclosed and they can either take it or leave it. Most will swallow hard and wrap up the deal.
It's hard for me to remember that many buyers, especially owner occupant buyers, expect to be delivered a move-in, or close to move-in ready house at closing.....on principal. Just not the world I live in. Everything in my world is about price and terms. Not vacancy or occupancy or lease terms. Not condition or repairs. In my case, not always even marketable title. This comes up when family and friends are buying houses. They want the house at the contract price, sometimes for even more than their offer, but they whine about what the seller won't (or can't do). And walk away from houses they want over stuff like termite quotes and sewer repairs.
Tenants and squatters and known repair and lien issues are negotiation points. For sellers with no cash, repair costs are negotiated and it comes out of their proceeds. I would never ask a seller that is vacating a property to fix it for me. How would I ever get a discount? :)
I agree with @Account Closed and @Bill S. When problems arise I look at them as opportunities to get a better deal. I got $50,000 off of a $150k purchase recently when things were misrepresented. I could have cut bait, but I don't want to cancel a deal. I try and adjust the terms so it still works for me.
On a final walk through a couple of weeks ago, on a different property, I got $1500 off for some stucco damage that was hidden behind a door leaning against the wall. I didn't call the seller a liar, just said this has been hidden behind the door and I need a reduction. I was past my inspection period but we both wanted the sale to go through the following day.
Andrew,
On whatever your final decision is, I congratulate you - what a learning experience!
But I am just curious - so far, in this process, how much are you out-of-pocket? My ballpark estimate is $600, assuming you had a property inspection & sewer scope. Also, based on your posts, it is clear that you have spent a lot of your time on this matter. While that amount is likely paltry in relation to the purchase price, I am sure that it is not insignificant to you personally.
Given the amount of money & time you have put into this, I am in the camp with @Account Closed and @Bill S. on this one. I operate under the assumption that all sellers have a strong monetary incentive to maximize the proceeds from their sale, and many will operate in a 'less-than-principled' manner, so for simplicity, assume that whatever the seller says, it may not be true. It may be true, but it also may not be true.
If your issue is about sellers who are 'less than 100% truthful', I am not sure that you can have any more certainty on that the next property you look at - that next seller has also never met you before, has no relationship with you & has the exact same monetary incentives.
Just to be clear, I am not advocating that you go against your principles!!! If you feel strongly about it, by all means, do it. But, since this unpleasant situation has cost you a not insignificant amount of money & time, you might consider your different options.
Once again, I wish you the best whatever your final decision is! You've got a lot of people on BP rooting for you. :)
I agree with @Account Closed and @Bill S. When problems arise I look at them as opportunities to get a better deal. I got $50,000 off of a $150k purchase recently when things were misrepresented. I could have cut bait, but I don't want to cancel a deal. I try and adjust the terms so it still works for me.
On a final walk through a couple of weeks ago, on a different property, I got $1500 off for some stucco damage that was hidden behind a door leaning against the wall. I didn't call the seller a liar, just said this has been hidden behind the door and I need a reduction. I was past my inspection period but we both wanted the sale to go through the following day.
Yeah, you can't engage at the level accusations or of misrepresentation. You engage at the level and what you will and won't do and for what price.
In a real "community" we'd all be MUCH more accountable to to each other. That is not what is happening when making offers on the MLS. The MLS is essentially an anonymous world of buyers and sellers with (typically) 2 agents in between, one of whom you didn't select. Just not the place to teach anyone a lesson or hold out on principal.
A buyer doing what they said they would do, especially getting funding into escrow, is a super powerful place to be when sellers start to get pesky. That's when you say what you will and won't do. That's when the other agent often wants the deal to close and is more prone to talk sense into their client.