Madison, WI · Member since 2017 · 2 posts · 0 votes
I just received an accepted offer on a 2-unit property. On the listing it said that leases were month to month and rented for $1040 and $1045. I had an addendum r but the rent schedule had TBD in the unit number box on line 13 but does state that I have 3 days to disapprove on line 22. This should have probably been a red flag but was not brought to my attention by my agent. When I received the leases I immediately noticed that the signed leases where not for the amount on the listing and instead were $875 and $975. Attached to the leases was letter from the current owner to the tenants stating that rents were going to increase to the amounts that were on the listing on the month that closing is scheduled for. The tenants did not sign the letters. As we all know, we buy rental properties based on the evaluation of rents, do you think this is enough to cause the offer to be null and void because of disapproval?
Factual misrepresentation is a legitimate reason to back out.
However, it's also a legitimate reason to renegotiate the deal.
Pick a price that makes sense given the actual rents. Drop it another 10% or so, and offer that. Renegotiate on the basis that the seller misrepresented a pertinent fact about the property.
And then, afterwards, if you can get rents up close to what was advertised, great!
Life gives you lemons, make lemonade. :)
Or, alternatively, require the updated leases to be both signed and notarized. But I'd rather see you score on the price drop if at all possible. Draw things out a bit, don't ask for the price reduction until 1 day before you are to lift contingencies. Make it a little painful not to do what you want.