My neighbor's friend came to me and said they'd like to buy my house, which was not yet on the market. She is a licensed real estate broker from California, my house is in Hawaii. We went back and forth a few times and agreed on a price and wrote up a purchase contract using the Hawaii Realtor form without using a broker (no commissions).
The buyer is also going to be my renter until we go to closing, expected in January which is 5 months away because they need to have 2015 taxes filed to qualify for a V.A. loan. I agreed to lock-in the price and sign the contract now because it's bird-in-hand.
While the buyer is renting my house which they will be buying, they are finding things wrong with it -- carpet is heavily stained and worn (it is, my last tenants were awful), there's dings in the drywall (again, bad previous tenants), the mirrors and light fixtures are rusting (Hawaii is humid, things rust fast), and there's bugs, possibly termites.
What, if any of this, am I responsible for? The purchase contract says nothing about getting new carpet or new shiny fixtures. But I want to do what is right without going overboard.
@Scott K. Unless there was some sort of "inspection" period noted on the contract you are not on the hook for much of anything. One would think she had an idea of what the condition was prior to giving you an offer but regardless had they set aside the time for due diligence she could've voiced her concerns then.
There is a general inspection period which is to occur within 12 days after Dec 1. The Buyer can terminate the contract if the issues are not resolved with the Seller (me).
There is a termite inspection to occur 7 days after Dec 1. If live termites are found, the Seller (me) has to have the problem fixed.
I guess it boils down to negotiations, even after the contract is signed.
The prices in Hawaii went up a lot. Your buyer may have gotten a great deal. If so, they may close without asking for any concessions. If they do cancel the contract, you may be able to get a lot more for the property.
That's good to know. I know that the wintertime high-season is the best time to sell, but I didn't want to take a chance. I've noticed that the prices in my neighborhood were slipping since I locked-in my price, but they'll probably re-bound between now and winter. Current active listings are still below my locked-in price.
Renting to your buyer before closing is bad to do. I hope you are not giving them below market rent and I hope you have a large nonrefundable deposit
Did they open escrow and provide earnest money? Sounds like it could be a scam. Didn't you have trouble with the HOA over short term rentals? What if they start doing short term rentals?
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing