Would you pay for the repairs to a property prior to closing?

Would you pay for the repairs to a property prior to closing?

Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes

I was just under contract for a duplex that needed 2 repairs prior to closing that would have cost in the $7500-10,000 range.

The first was changing a small electrical sub panel which currently holds 2 fuses to an up to code breaker box. I was unable to find insurance that would even bind a policy with these fuses so it was a must fix issue.

The second was that there were 8 telescopic support poles in the basement that needed to be replaced with permanent poles prior to closing per the lender.

The deal itself was only mediocre cash flowing about $400/month.

Would you have made these repairs at your expense prior to closing? The seller was being difficult and preferred to let the deal fall apart even though it had been on the market for at least 60 days prior to me putting it under contract.

I terminated the deal because the Seller had been so difficult I did not feel secure in paying the upfront prior to closing expenses.

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
2y
Quote from @Alecia Loveless:

I was just under contract for a duplex that needed 2 repairs prior to closing that would have cost in the $7500-10,000 range.

The first was changing a small electrical sub panel which currently holds 2 fuses to an up to code breaker box. I was unable to find insurance that would even bind a policy with these fuses so it was a must fix issue.

The second was that there were 8 telescopic support poles in the basement that needed to be replaced with permanent poles prior to closing per the lender.

The deal itself was only mediocre cash flowing about $400/month.

Would you have made these repairs at your expense prior to closing? The seller was being difficult and preferred to let the deal fall apart even though it had been on the market for at least 60 days prior to me putting it under contract.

I terminated the deal because the Seller had been so difficult I did not feel secure in paying the upfront prior to closing expenses.

Good for you.
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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    2y
    Quote from @Alecia Loveless:

    I was just under contract for a duplex that needed 2 repairs prior to closing that would have cost in the $7500-10,000 range.

    The first was changing a small electrical sub panel which currently holds 2 fuses to an up to code breaker box. I was unable to find insurance that would even bind a policy with these fuses so it was a must fix issue.

    The second was that there were 8 telescopic support poles in the basement that needed to be replaced with permanent poles prior to closing per the lender.

    The deal itself was only mediocre cash flowing about $400/month.

    Would you have made these repairs at your expense prior to closing? The seller was being difficult and preferred to let the deal fall apart even though it had been on the market for at least 60 days prior to me putting it under contract.

    I terminated the deal because the Seller had been so difficult I did not feel secure in paying the upfront prior to closing expenses.

    Good for you.
  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    @Alecia Loveless - Good stuff! I would have done the same on such a slim deal. This is something that I normally would work to have the seller cover so we can actually close the deal. I ran across a similar situation on a recent acquisition. We discovered there were lead findings in the due diligence process which caused issues on the lending front. We ended up getting the seller to pay for the lead mitigation of the units before close. We did split the cost with him but it turned into a win/win. We got units lead certified (which are more valuable due to being able to rent to section 8) at close and the lender was able to sign off on the environmental issues. 

  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Alecia Loveless:

    I think you made the right choice. Maybe the seller will suffer for a while, then come back and beg you to buy it.

    The DIY Landlord Book4.7247 Reviews
  • Thomas TalbertBusiness Member
    Property Manager · Austin, TX · Member since 2024 · 96 posts · 71 votes
    2y

    That's a bummer you had this experience with a seller although it is not uncommon. Quite honestly in that scenario I get frustrated with the seller's agent because you know that The agent if they were doing their job would explain to them that that is not generally how these things go and that they are being unreasonable. 

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