Pool Demo prior to Close

4 Replies

Under contract for a house which has an unserviceable pool I was planning to demo after closing. I am using conventional financing and the appraisal came back that the pool presents a safety issue and must be remedied. The lender is now stipulating this must be completed before closing.

Any experience renegotiating (for sale by owner) a PSA to have seller complete a major repair like this as part of a purchase contract or creative ways to convince lender/underwriting to allow the sale to go through and the demo will be completed post sale?

Originally posted by @Erik Towal :

Under contract for a house which has an unserviceable pool I was planning to demo after closing. I am using conventional financing and the appraisal came back that the pool presents a safety issue and must be remedied. The lender is now stipulating this must be completed before closing.

Any experience renegotiating (for sale by owner) a PSA to have seller complete a major repair like this as part of a purchase contract or creative ways to convince lender/underwriting to allow the sale to go through and the demo will be completed post sale?

I doubt it if the seller will agree to this given that this is a major cost.

The only wau out of this is use a different lender - say a hard money lender who does not care about the current condition of the property. But, he will charge you an arm and a leg in points and interest rate.

How good is this deal? How much is it worth (ARV), the repairs and how much are buying it for?

@Michael Ealy

Michael, thanks for the reply. I don't think the deal crosses into the hard money territory but is decent. Purchase price is $100k, expected $10k in pool demo/cosmetic repairs and an ARV of $130k. Market rent is $1k/month and would be purchased as a buy and hold.

I believe my best recourse at this point is to see if the seller is willing to complete demo and I’ll add the cost to the purchase price but if I was him I wouldn’t be keen on that. Going with conventional lending and a government backed loan I don’t think I will be able to avoid the pool situation.

@Michael Ealy

Michael, thanks for the reply. I don't think the deal crosses into the hard money territory but is decent. Purchase price is $100k, expected $10k in pool demo/cosmetic repairs and an ARV of $130k. Market rent is $1k/month and would be purchased as a buy and hold.

I believe my best recourse at this point is to see if the seller is willing to complete demo and I’ll add the cost to the purchase price but if I was him I wouldn’t be keen on that. Going with conventional lending and a government backed loan I don’t think I will be able to avoid the pool situation.

Ask the lender if you can escrow the cost of the demo and have a requirement to do it within 30 days of buying the house.