My wife and I had our offer accepted on our first investment property. It is a duplex in a great part of town that is nearly turnkey. Our offer was $15,000 over asking. The inspections came back earlier today and listed many minor issues but did reveal a few concerning items. The home has a crawl space which revealed a significant amount of water damage to the stringer joists and parts of the floor framing. Additionally, they recommend installing new vapor barrier. They seem to believe that all of this moisture damage is related to a lack of proper guttering on the sides of the house. There also is visible fungus on the beams and evidence of past termite infestation and subsequent treatment but no evidence of active infestation.
Looking for advice on how to proceed? Obviously these findings are not things we could have easily seen on walkthrough and likely will be quite expensive. I've been given rough estimates of somewhere in the 15-20k range although we just got this information back today. Would it be better to ask for reduction in offer or for the seller to pay for the repairs directly? I think the required repairs may be more than a credit would allow for but I could be wrong?
The numbers still work with repairs up to $25,000 but given the great condition of the home otherwise we were disappointed with the findings in the crawl space and don't want to have to walk away from the deal. Any advice would be appreciated!
I would approach this in two different directions.
First have your agent call their agent and tell them that $25,000 to $30,000 repairs are
scaring you almost away. The next statement from their agent will be either. I know would
your buyer consider a reduced sales price to cover those issues ?
Both agents get a their pay day if the deal works. They both want it to go through.
It's your agents responsibility to represent you. Talk to the other agent and get it worked out.
if i were your agent ,counter at full price and owner to pay for $10,000 of repairs and the
10K will be held for same.
This way you don't get an appraisal issue .
Win for you , you have $25,000 more than you payed for ( with the $10,000 cash from seller).
Seller can tell their piers that they got full price.
Agents get full comish for sales price.
aaaaaaaa win, win, win
@John Hawkins What sort of contingencies are in place on your contract? Hopefully, there is a home inspection contingency to allow you to back out of the deal, IF it is needed and still get your earnest money back.
I would definitely have your agent reach out to the seller's agent to communicate the issue and the cost it will take to repair it. You have a few options from there.
1) Ask the seller to repair it
2) Ask for a credit at closing and do it yourself
3) Ask for a reduced purchase price and do it yourself
The issue with asking the seller to do it is they could refuse or they could agree to do it but then do a crappy job on it.
My preference would be to first ask for a reduced purchase price equivalent to the cost of repair. If they refuse, then ask for a credit at closing for the same amount. If neither is accepted, then I'd ask to get a portion of it covered at a reduced price or credit (if I really want the property). Since you said the numbers still work up to $25k in repairs, anything you can get is a bonus for you.
Thank you both for your advice! We do have an inspection contingency in place so could back out but we really want to make it work. Seeing as though this is our first deal, our first mistake was not being more aggressive with the inspectors and our inspections were performed towards the back end of our inspection window. I now feel a little rushed to submit our post inspection addendum. I wish I had time to get a contractor to come out and give me a solid estimate on the repair cost but I guess assuming its going to cost more than I think and asking for that amount can't hurt.