Negotiating a bad inspection with mold & water damage

Negotiating a bad inspection with mold & water damage

Member since 2020 · 1 post · 0 votes

Hi All - Looking for some advice on negotiating a bad inspection from the buyer perspective. Illinois 3 bed 1.5 bath single family 110 sqft 1980's home. Standing water evidence in the crawl space and mold growth (not black mold). Leaking toilet grey water into crawl space. Roof needs to be replaced and about 2-5k of other defects. All in about 30k of repairs needed for only 200k accepted offer price. The owners had no idea of the water/mold (i believe them and have done due diligence to confirm). They were not expecting any of these issues. So my question is how do I best approach this. This unit is also being rented and the owners are willing to work with us but could walk away too (fix it on the cheap and resell later). I really dont want to close and then fix it to then assume liability for anyone who gets sick from mold... My thought is to escrow an amount of 125% of the quoted costs during closing and have it fixed after closing utilizing the escrow. I dont want to prolong the closing and lose rents either.  Any advice on if escrow repairs are difficult or if its better to just negotiate a lower price upfront would be appreciated. 

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  • Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    As seller I would not agree to your proposal.  I would walk away, fix and resell.  

    Easiest and best to renegotiate purchase price.  

    Also I would demand a provision in the amended contract that tenants are to be notified of the mold prior to closing and that they will be granted to right to vacate the premises without penalty (i.e. entitled to break their lease with the current owners if any).  Alert them also that you will begin remediation activities within x days of closing and will not be responsible for providing alternative accommodations during the remediation as this will help inform their decision to move.

  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y

    Honestly almost every crawl space in america has water and mold problems. Its a defect in that type of construction.  I dont buy houses on crawl spaces because of it. 

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