Chattanooga, TN · Member since 2019 · 22 posts · 8 votes
My wife and I are planning on closing on our first property Thursday. The buyer has asked if it is ok for us to close on our target date even though the repairs to the house that the seller is contracted to fix are not all done? He claims COVID is making it hard to get all the contractors out quickly. They promise they are all scheduled to be fixed. Thoughts? I don’t have a problem with this as long as they get fixed.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
"The buyer has asked if it is ok for us to close on our target date even though the repairs to the house that the seller is contracted to fix are not all done? "
Well after closing the seller is a LOT less motivated. How about getting a credit instead?
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
6y
DO NOT agree to this just based on a promise. I've been burned by this in the past.
It is easy enough to have the title company withhold funds in escrow until the repairs are done. That gives the seller incentive to get the work done. If you choose, you could even take over the responsibility of getting the repairs done and the escrowed funds can be released to you instead of the seller.
Chattanooga, TN · Member since 2019 · 22 posts · 8 votes
6y
@Greg Scott
Thanks for the input. If I were to go threw with the sale and they are contracted to fix those problems. Could i sue them if they do not fix it or don’t fix it to my expectations. I’m not saying i am. I would just like to know what I could do.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
"The buyer has asked if it is ok for us to close on our target date even though the repairs to the house that the seller is contracted to fix are not all done? "
Well after closing the seller is a LOT less motivated. How about getting a credit instead?
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
6y
@Jeremiah Russell Anyone can sue anyone for any reason. But, you are likely to waste a lot of time and money suing if that is your fall-back plan. And, you might lose. You are in the drivers seat now. You won't be after you close.
Guessing you are the buyer. Tell him sure, but $X is held back until repairs are done. Make sure that is more than the repairs will cost plus $Y (say $2K) and put a deadline on it. After that date, you get to keep the $2K and (if you want) the $X for repairs transfers to you and you take care of the repairs.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
For all the people advocating holdback, title companies hate having escrow sitting around after closing. Add in that it's one more roadblock to a seller to get the money since both sides need to sign on a release, so the buyer has upper hand and can be an a-hole if he wants.
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Jeremiah Russell. If you want to keep the closing date, definitely have the repair funds placed into escrow, or given to you at close. That is what we have done in the past. Due to weather in January, we had work that was delayed. Simple fix. The seller simply cut a check for the repair cost to the contractor, and that check was then held by me until all the work was completed.
We are an attorney state so the attorney is the one holding the escrow. In theory it sounds simple enough. Replace banister $300 + %50 escrow $450 until banister is done.
A month goes by the expected contractor hasn't responded. 4 calls to each attorney (for no additional pay). Finally get some agreement on someone going out. New contractor goes out and does the work. The buyer feels the work was meh. Also the stain was supposed to be black cherry not burnt walnut. More calls to the attorneys who end up arguing over the wording on the SOW for release of funds. They can't close out their file (a few hundred dollars on their side) until it's solved. They have now become unpaid consultants on a repair, that they really don't know anything about.
Get a credit, hire your own people to do it after closing and it removes everyone else from the equation.