I've been trying to buy a house for a while now. Recently this June, I saw a detached 2 Family house in Woodhaven, New York. The Seller is an investor and he didn't want to use an agent. My brother and I go to the open house but when we get there he cannot provide access. We spent about 20 minutes talking and he specifically said he can deliver the house vacant if we wanted and he can show us his bank statements for the last 18 months to show that his tenants are paying on time (the tenants currently don't have a lease and have a month to month agreement). We exchange contacts and said we'll keep in touch to set up another appointment. His asking price was 650K non-negotiable (a little high bit still reasonable). A month goes by I keep checking in periodically and still nothing. It wasn't until the end of July that we finally set something up, and he didn't even show up, he had his first floor tenant let us in. We saw the first floor and the basement, we did not have access to the second floor. From what I saw I felt comfortable enough to make an offer for the full amount.
We get a copy of their butchered statements (because they've just been depositing into their personal account instead of a separate business one) and felt very uneasy about the second floor tenant. We went back to them and said hey your statements aren't satisfying we want it vacant instead. There was a bunch of back and forth and what it came down to was they can delivery the first floor empty, and they wanted to raise the price by 30K to vacate the second floor. I didn't want to waste anymore time so we agreed to only have the first floor vacant (I planned to get rid of the second floor myself if they turn out to be a problem). It is late August by the time we finally signed the contract with a 60 day time frame. There are a few outstanding DOB violations on this house, a previous landlord had illegally converted the basement into a SRO. Long story short, they got rid of the SRO but the violate wasn't cleared with the DOB. My lawyer put in a clause for the seller to correct any outstanding violations because it maybe an issue for the bank.
About a week goes by and I get a call from a very angry appraiser, long story short, they agreed to see the house on a Saturday and the seller was a no show. This holds everything up for a entire month and my mortgage company had to hire a different appraiser during the process. Things get going again, my mortgage broker locks in my rate and my lawyer orders a title search. Then last week my lawyer gets a fax from the seller's lawyer saying that the 60 days are up and is threatening to send the contract back. The title search came back last Friday and all of the outstanding violations are still there. I can bring up the violations and pretty much cancel the contract and get my down payment back, but I want that house. The violations aren't an issue for me, I have architectural background, the basement from what I see is already pretty bare, at most I might have to take out the bathroom still in the basement, file papers with the DOB and get an inspector in to look at the place. So its only a matter of time, money, elbow grease and headache from dealing with the DOB for me. Though the violations might be a huge problem for the mortgage.
Any thoughts? and options i might have?
Wow what a nightmare, I would probably walk away from the deal, do you have a non refundable deposit you would lose? The seller seems like he is hiding something, I wouldn't move forward without walking through the entire place.
If you walk away and it stays on the market you could also then submit a lower offer.
WALK! Show the agent and the seller they can enjoy 365 DOM and more.
Sounds like you got too attached to the property and are willing to overlook problems with the property and the seller. Seller does not appear very motivated or serious. Property has violations which may prevent you from getting a loan. And you still really want the house??? Time to take a break from it all to clear your head.... And then decide whether you are willing to put up with all the issues here.
@Scott McMillan, @Jeff B. , @Patsy Waldron
A quick update. I have closed on the house. My bank came through and pull a miracle, the violations were not a issue for them and my lawyer was able to straigten everything out on the day of closing, the $1200 I paid her is the best $1200 I've spent all year. We closed last Monday.
The down payment was refundable but I really wanted the house. Walking away was not a good option because the market is hot in Woodhaven right now. In the time from when I first saw the house in June to now the price has gone up a significant amount. If I had walked away the seller could have technically sold it for a higher price in a very short time frame. My brother and I really want to close on a house before the end of the year, to start the looking process over again in November and find something decent and up to our standards is pretty much impossible.
So far it seems like it will take a while to get of the second floor tenant. The DOB violations seem like they just need the right paper work and a inspection to get cleared.
Patsy I did get way too attached to the house. Most of the issues with the house are pretty minor to me, except for the second floor tenant. The seller could have sold his house faster and for more money than what I paid, if he just got his act together.
I plan on renovating and separating the utilities after I get that second floor tenant out.
I'll update when I get to that point
I'm just going back home from the new house after speaking with the second floor tenant. I find out that the second floor tenant hasn't paid rent in the past two months, which isn't surprising considering the previous owner was trying to evict them and he was pretty much a slum lord.
I am trying to get them out as soon as I can so I can start on renovations and then move in. The tenant wants 10k to move, I feel that is high. Any thoughts?
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