Buyer seems to have locked me in while he shops other deals

15 Replies

He is an out of state investor who had his realtor come look at the place the first day, send video, etc. They were adamant to be mutual/under contract that night so that it would be marked pending...

Now they seem to be milking the 10 day inspection period. One reschedule after another. Inspector came back with a lot of subjective opinions, such as the deck MIGHT not be permitted, the washer and dryer work but look old and will likely need to be replaced/are due for replacement, etc.

Now the guy wants to come and look at the place in person....it's been nearly TWO weeks. My house has been marked pending and NO ONE comes to look at a house once it's marked pending. I had it out with their agent last night, pushing to get them to make a decision but no dice. They said they would decide in the morning. Although they came up with $4,500 in bogus repairs (washer and dryer work but are old, deck may not be permitted, gutters need cleaning, all of $4,500!!!) I offered to fix some legitimate issues like the cleaning of the gutters, and give $2,700 in concessions toward closing costs. They still would not make a decision, wanting to call the same inspector that said hey, the garage doors work but might need maintenance, the deck MIGHT be un-permitted (it's not).

Merely cancelling the contract and relisting guarantees I lose the deal at this point, but how can I get them to make a decision or get off the pot before I lose yet another weekend on the MLS? It sure seems like he wanted to get it under contract quick to keep it off the market but is taking his sweet time to get the deal done.

I responded similarly in your other post about this but if you accepted the 10-day period no sense in getting worked up until that 10 days is over. You can't accept a 10 day period and then get upset when things aren't wrapped up in 5 days.

Tying up a property like this is a very common buyer strategy. Annoying, but common. On Day 10 you have the leverage to force their hand. Until then, there's not a whole lot you can do unless they first give you an ultimatum on making repairs or walking away from the deal.

Honestly, this is a great negotiation tactic on your buyers part. I use this method quite a bit. Not to frustrate the buyer, but in a sellers market, this can be the only way for a buyer to get some sort of leverage. I don't have any advice for you other than to say that it's likely the buyer doesn't want to lose the deal either- you are locked in to a game of chicken and have to decide how far you want it to go. Keep in mind, you may be able to get out of the deal and keep the earnest money- maybe, so that could give you a bit of solace.

One way to counter this in the future is when you get an offer, counter with different terms- shortened inspection periods, shorter expiration, property "as-is" etc. In my area, many investors are making cash offers without inspections, which is a good way to get a sellers attention. You can always counter with whatever terms you like in an effort to swing the momentum back in your favor.

Best of luck!

Corby Goade, Real Estate Agent
208-297-3010
Originally posted by @Corby Goade :

Honestly, this is a great negotiation tactic on your buyers part. I use this method quite a bit. Not to frustrate the buyer, but in a sellers market, this can be the only way for a buyer to get some sort of leverage. I don't have any advice for you other than to say that it's likely the buyer doesn't want to lose the deal either- you are locked in to a game of chicken and have to decide how far you want it to go. Keep in mind, you may be able to get out of the deal and keep the earnest money- maybe, so that could give you a bit of solace.

One way to counter this in the future is when you get an offer, counter with different terms- shortened inspection periods, shorter expiration, property "as-is" etc. In my area, many investors are making cash offers without inspections, which is a good way to get a sellers attention. You can always counter with whatever terms you like in an effort to swing the momentum back in your favor.

Best of luck!

 I've used this tactic on short sales, using contingencies such as the inspection to get out of the deal if it ended up getting bank approval but I had already bought another place. This is a bit different because I've since given notice to vacate to 2 tenants and am out thousands of dollars in profit AND am carrying the mortgage myself if the deal falls through...

Part of the reason I wanted to get a decision yesterday was to lock him into the computation of time for the inspection period. That's because he is coming to look at the house in person on a flight Monday (holiday). I didn't want him to still be in the inspection period and then look at the house then try to decide to back out after an in person visit using the inspection period to walk away with his earnest money in his pocket. I suppose if he decides today to go through with the deal post inspection then looks at house Monday the earnest money is mine since he will have already signed off on inspection at that point. That's what I'm essentially pushing for at this point, getting him to decide before his in person visit Monday so I can keep the EM if he backs out after that visit.

While it's a great tactic for HIM, it comes at 8K a month expense to me, as such I'm not willing to let him walk away scot free while I wasted several weeks of time thanks to him and cost me 8K per month while I relist after two weeks have been wasted and now the house will have a stigma since it has been on there for a while and was pending but now is not.

I'm considering giving him until noon today to make a decision or I will cancel the contract and relist so I can get some traffic this weekend. As I said, the inspector made up things because he couldn't find any legitimate issues. You guys are forgetting that while this tactic is great for him, it doesn't cost him a dime, it costs me 8K a month....

Why would you give notice to vacate to the tenants.  I understand letting them know you are selling the place but it seemed early.  Was it in the contract that they vacate?  Maybe you should have waited until the person was too deep to get out or added that if he backs out you would keep the deposit because the terms were to give notice to vacate.

Understand both sides - it is not good you are losing money yet that was your decision.  The buyer is looking out for his best interest.  You need to look out for yours (what could go wrong and how to mitigate it).  Your agent should make recommendations yet it is your call.

@Jack B I guess I'm confused. Is the 10 day period up already or not? If it is, the EMD should be yours already if they let it pass without bailing on an inspection issue within that 10 day window.

If the 10 day period isn't up, there isn't much you can do except wait until it is. I don't see anything shady here on the buyer's part. 10 days is 10 days if you agreed to it. And I realize I'm not seeing the whole picture but I probably wouldn't have given notice to the tenants until I was sure we were clear of inspection issues either. If I'm missing something set me straight.

@Jack B. you use this "lock it up fast and negotiate later" tactic when you buy? It seems someone is using it on you. You "think" somehow this is different then when you do it, but it's not. The buyer is doing what the thousands of other REIs do when they lock down properties and then use their contingencies to either reduce prices or get out of the deal. He is playing the same game on you, that anyone in this business hasn't played on deals they lock up, and only after do their due diligence. Sorry you are losing money because of it, but with all the posters here talking about locking up deals, I have never seen one care about the seller, they'd only care about their business.

Very simple your buyer as @Ryan Murdock is within his due diligence period.

are you doing this as a FSBO.?

any decent realtor would have a cancellation out on the 11th day.. or an inspection addendum with further negotiations.

Also getting rid of your tenants without a non contingent offer and with someone who you ARE sure can close IE POF is real..thats a risk you take.

not sure why a washer dryer would be such an issue they are usually not included in the sale. or not a negotiating item

@Jack B.

If 10 days has passed, then you have a gripe. If not, do not forget you signed a contract saying the buyer has 10 days to get inspections done and make a decision. Not sure how things work in WA, but here, after 10 days, you send a 3 day cure notice for being in breach of contract and informing the other party they have 3 days to get their affairs in order, or you can cancel the deal and keep the EMD.

On a side note, where is your agent in all this mess or do you not have one?

Originally posted by @Brian Pulaski :

@Jack B. you use this "lock it up fast and negotiate later" tactic when you buy? It seems someone is using it on you. You "think" somehow this is different then when you do it, but it's not. The buyer is doing what the thousands of other REIs do when they lock down properties and then use their contingencies to either reduce prices or get out of the deal. He is playing the same game on you, that anyone in this business hasn't played on deals they lock up, and only after do their due diligence. Sorry you are losing money because of it, but with all the posters here talking about locking up deals, I have never seen one care about the seller, they'd only care about their business.

Did you not bother to read the post???? Read it again and see I said I use it on Short sales and they have no impact on the seller as it's not marked as pending until bank approves...jeesh.

Originally posted by @Lewis Christman :

Why would you give notice to vacate to the tenants.  I understand letting them know you are selling the place but it seemed early.  Was it in the contract that they vacate?  Maybe you should have waited until the person was too deep to get out or added that if he backs out you would keep the deposit because the terms were to give notice to vacate.

Understand both sides - it is not good you are losing money yet that was your decision.  The buyer is looking out for his best interest.  You need to look out for yours (what could go wrong and how to mitigate it).  Your agent should make recommendations yet it is your call.

Because I had literally that day to give them notice to vacate so that I could move everyone out by the closing date....The buyer is not looking for his best interests. He is screwing me over tying up a house while he milks every contingency as he shops other deals. AGAIN, did you not bother to read that part? It's costing me money, while it's not costing him anything to tie the house up...Not that hard to understand when I've already explained it to those who don't understand repeatedly. I use this tactic on short sales but has no effect on seller since they are free to accept other offers and their listing doesn't get marked pending unless the bank approves. BIG difference when someone uses it on a regular sale while it costs me 8K a month as they shop other deals. 

Sounds like they just want to beat you up a bit more on price hoping you are desperate to get the deal done. As far as ten days, that is not unreasonable and much better than  the unlicensed FRAUDS AND SCAMMERS asking for 30 or 60 day "inspection period" while they are trying to find a legitimate buyer. 

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

@Jack B.

Your posts are slightly confusing.

Can you explain two points:

Why did you ask the tenants to vacate? Was that a request made by the buyer?

Are you or are you not past the 10 day inspection period? If so, why haven't you cancelled?

@Jack B. YOU gave notice to your tenants to vacate.  I still do not understand why you had to make the tenants move out by the closing date.  Was it part of your agreement in the contract to do so?  

If a buyer is asking me to give tenants notice to vacate then they will sign an agreement that I will keep the the deposit money to compensate me for kicking them out if the deal does not close and that deposit money needs to cover the length of the contract.

It seems like you gave notice at your discretion.  If they are beyond their time frame then read your contract (that you signed) and understand your steps and move on.  It also sounds like you did not use a real estate agent either.

PS I will re-read your post to make sure I understand.

Originally posted by @Jack B. :
Originally posted by @Brian Pulaski:

@Jack B. you use this "lock it up fast and negotiate later" tactic when you buy? It seems someone is using it on you. You "think" somehow this is different then when you do it, but it's not. The buyer is doing what the thousands of other REIs do when they lock down properties and then use their contingencies to either reduce prices or get out of the deal. He is playing the same game on you, that anyone in this business hasn't played on deals they lock up, and only after do their due diligence. Sorry you are losing money because of it, but with all the posters here talking about locking up deals, I have never seen one care about the seller, they'd only care about their business.

Did you not bother to read the post???? Read it again and see I said I use it on Short sales and they have no impact on the seller as it's not marked as pending until bank approves...jeesh.

How do you know what impact your offers make on sellers, and how would this buyer? I did read, and my take is buyer is using the same tactic tons of other real estate investors use (you included) to lock up a property for themselves. I don't wish anything bad on your deal, I'm just pointing out how when on the other side of a deal, it sucks! Let us know how it plays out.

Well it is actually Much worse to do the “bail during inspection period, After bank approval on a short sale because I found something else/changed my mind” since at that point you have taken the seller’s property off the market for 30-60 days before the bank approval.

I saw this done Once, so from then on inspection periods were 7 days from contract execution, Not after bank approval.

It seems from your other post the inspection period isn’t over Tuesday.....so why the drama?

You’ll either agree or you won’t.

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