Buyer asking for compensation after closing as basement flooded

15 Replies

Just completed my first flip and sold the house on day one. Now with recent heavy rains the basement got flooded after closing. As per buyer there are signs of flooding before and they claim that I tried to hide that condition, but I never lived in the house and had no idea about any water issues. As part of buyer inspection it was identified that there were some signs of water seeping in and we gave some credit to buyer to fix that issue. Looking for advise on how to respond to this situation.

I doubt you are under any legal obligation to do much the way you describe it.  It'll depend on some on your state, though. 

I personally like to stand behind what I sell and would work on a solution.  I've gone behind closings many times and fixed things that weren't caught on an inspection and I didn't know where wrong.  Its the right thing to do, you are pitching a rehabbed house, it needs to work right.

I did have one that went similar to this when they had crazy heavy rains and the basement flooded and I offered to give them like $1-2k and they refused it, wanted me to pay for a $4k BS pump system from some retail outfit off of TV, which I wasn't willing to do.  Then I never heard from them again.  Bad move on their part, I hadn't done anything unethical or illegal so they were basically begging and I was being nice.

Anyway, whats the fix?  Is it a grading issue, wall issue?  Most of that stuff is easier to fix than most people think.  It just doesn't take much more than a couple of day laborers and some tar to dig out and tar a foundation if thats the issue, if its a runoff issue, just know that water flows downhill and divert it.  Might have to build some berms or trenches, but again, pretty easy fix, a day of labor and some minor supplies.  

If it was caught on inspection and you gave them credit... I don't know how they could claim it was not disclosed.

You disclosed you've never occupied the property.

They had a home inspection revealing water issues. 

They purchased the home. 

You should sleep comfortably tonight. 

People somehow think that they purchase a home, they're buying an apartment with 24-hour maintenance and lifetime warranty! It's called responsibility and people in this country have a hard time figuring out that once you sign for something, a car, a house, a loan, it's your's - not someone else's! 

Mark Gallagher, Real Estate Agent in New Jersey (#1221341) and Pennsylvania (#RS314542)
215-490-4851
Originally posted by @Himanshu Jain :

Just completed my first flip and sold the house on day one. Now with recent heavy rains the basement got flooded after closing. As per buyer there are signs of flooding before and they claim that I tried to hide that condition, but I never lived in the house and had no idea about any water issues. As part of buyer inspection it was identified that there were some signs of water seeping in and we gave some credit to buyer to fix that issue. Looking for advise on how to respond to this situation.

Seems like they suspected that there was or might be flood issues so they should've purchased the extended title insurance coverage, not bother you. You gave them credit for that particular issue already and they were sapposed to have it handled; yet they closed anyway... Anything further you might want to consult with an attorney to prepare for possible litigations over this. My coin.

Kudos,

Mary

If you want to be a dick (under cover agent) you could try to help them resolve the issue as a courtesy. If in your shoes though I would let them know definitively that even though I'd like to make the situation right that was the reason for the credit in escrow. Better to clarify your position that way then have them Infer through your generous spirit that they may have a claim against you. If they're not happy with that then you tried and you should be the other kind of "under cover agent".
Originally posted by @Darrell Shepherd :

I doubt you are under any legal obligation to do much the way you describe it.  It'll depend on some on your state, though. 

I personally like to stand behind what I sell and would work on a solution.  I've gone behind closings many times and fixed things that weren't caught on an inspection and I didn't know where wrong.  Its the right thing to do, you are pitching a rehabbed house, it needs to work right.

Thanks for the comments and suggestions. I agree, I have used the best materials and have not cut corners anywhere while rehabbing the property, I stand by the product and want to do the right thing. I think I am going to reach my attorney as well to make sure I am covered. I just want to make sure that out of goodness I do not put myself in a precarious situation.

Originally posted by @Mary B. :

Seems like they suspected that there was or might be flood issues so they should've purchased the extended title insurance coverage, not bother you. You gave them credit for that particular issue already and they were sapposed to have it handled; yet they closed anyway... Anything further you might want to consult with an attorney to prepare for possible litigations over this. My coin.

I am reaching out to an attorney too, to make sure I am covered. I would assume the insurance should cover them too for such an incident.

@Himanshu Jain

The problem with helping them out is that where does it end.. when the toilet clogs in 3 months because they flushed 7 rolls of toilet paper down the toilet one time, are they going to call you and ask for help? It's unfortunate that giving an inch now, they may want a foot later. Better to hold firm and tell them to file an insurance claim.

Mark Gallagher, Real Estate Agent in New Jersey (#1221341) and Pennsylvania (#RS314542)
215-490-4851
Originally posted by @Mark Gallagher :

@Himanshu Jain

... Better to hold firm and tell them to file an insurance claim.

Tell them to NOT file an insurance claim unless they have a flood insurance policy. If it were due to a burst pipe, home owner's policy might cover that ...

Be careful about doing or offering anything before talking with your attorney. Sometimes the simplest things you may say or attempt to do can then be used against you as you "admitting fault."  I don't know the laws in MO but I have seen it happen in TN. Good luck to you and I applaud you for wanting to do the right thing. There are so many flippers that do cheap, jack-leg work, which inturn, give us flippers that do good, quality work, a harder time when people hear the words, "It's a flip."

901-545-9092
Originally posted by @Mark Gallagher :

You disclosed you've never occupied the property.

They had a home inspection revealing water issues. 

They purchased the home. 

You should sleep comfortably tonight. 

People somehow think that they purchase a home, they're buying an apartment with 24-hour maintenance and lifetime warranty! It's called responsibility and people in this country have a hard time figuring out that once you sign for something, a car, a house, a loan, it's your's - not someone else's! 

 THIS.  

I will add that you should get your lawer to type this up on a nice form letter and send it offer to them as well.

David DuCille, Real Estate Agent in FL (#sl3293872)
813 812-4712

@Himanshu Jain

You're a good person by wanting to make them happy. However, think of your business.

You can't make *everyone* happy. Even the best businesses will get a bad review or two.

Like mentioned several times, this issue was caught during inspection. You gave them some credit/money for it. You were NOT shady. You did everything right. 

They are adults and own the house now. Fixing stuff is what comes with houses, both new and old, both just rehabbed and out-of-date.

I wouldn't even respond at this point beyond reminding the fact that this issue was disclosed in inspection and a credit given. Don't get dragged into their problem. They'll probably go away. If they are actually crazy enough to send a attorney's letter or even suit to you, THEN respond further.

305-537-6252

Ballwin, MO has had more rain in the last few weeks then it has had in a LONG time. They have absolutely no ground to stand on. You already "addressed" the issue. I am literally in their position. I bought a house and moved in. My first night here I could literally hear water gushing into my crawl space. When I bought the home I knew it had some grading issues. I had a berm installed alongside the home, buried my down spouts out 10 feet with popup drain tiles, and cleaned/rehung the gutters. It POURED yesterday and the lost next to me was literally a swimming pool. But my landcapers fixed the issue. No water made it into the crawlspace or even near the house. 

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

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