Knowing when to say when
I thought I would share another chapter in my growth as an investor. I had a closing scheduled for today at 3 PM. All was well until about 9 AM this morning. Here's my story:
I put together a deal to buy a SFR, buying from an owner-occ. that was behind several years in taxes. She was still living there, everything appeared to be in ok shape with minor rehab. needed. I won't get into great detail, but it was a pretty decent deal, but not what I would consider a home run. All in all, worth making it happen. I had been back and forth with the seller over several months. But I digress, we have an agreement.
A week after the offer is accepted, I get a text from the seller, she has moved out, is shutting the heat off and "winterizing" the house. Ohhhh, really I think, but don't say out loud. I simply say that I will want to do a final walk through before closing. Two weeks ago, my phone is blowing up, why am I taking so long to close, blah blah blah, you (beep) (beep) (beep).
I don't take the harsh language too seriously, but it did put me a little on edge. End of last week, find out the reason for the holdup is that the so-called "free and clear" property has a mortgage and "oops", didn't know about the judgments either. Turns out the hold up isn't ME after all, but it is still apparently my fault.
Wake up this morning, ready to close, just need to do that inspection at 11. Then I get the text, "can we do the inspection at 1?" (que the sounds of alarms) "umm, sure". Ten minutes later, "we found a broken pipe and want everything to be right before you buy the place". That little man on my shoulder that warned me to do a final walk through starts to chuckle. A few minutes later "you can come over any time" to which I reply "is it all fixed". Seller's response, "um, no we found more and think you should come look at it right away".
To shorten my story, the plumbing system is trashed and what isn't trashed is frozen solid. Turns out the few bucks saved on propane probably would have been cheaper than the damage caused by not buying propane and not properly winterizing. I ask for a $ 1,500 credit, they say that is crazy, they would only offer $ 100. Needless to say, it didn't close and probably won't with me as the buyer.
Disappointing to say the least, but my cost to repair would have taken up most of the credit and the aggravation of an overly dramatic seller was worth more than what would have been left. Now I am going to look at some of the other potential deals I have sitting on the burner to see if any are ready yet.
Comments (10)
Winterizing the house probably meant nothing more than shutting off the heat and hot water to the seller. When a sale falls through like this, do you have a deposit at risk?
Victor A., over 12 years ago
Winterizing a house PROPERLY requires much more than that to fully protect the system. When we do it, we use air compressors to blow as much water out of the water pipes as possible, shut down, tag out and drain the water heater, and empty the toilet tanks, pump out the toilet bowls, and add RV antifreeze to every toilet and trap to properly protect the drain lines as well. I do have a $ 250 deposit tied up right now because the seller has decided to be difficult and sue for performance. HOWEVER, the clause in my contract that gives me the right to inspect the property up to 48 hours prior to closing also clearly states that the seller is to maintain the utilities and heat up until closing. The lessons here are to use small deposit amounts wherever possible and use a strong contract to protect yourself. She doesn't have a leg to stand on, but she thrives on drama so this is how it is going to be. If she drags her feet long enough, the County will foreclose for the taxes she didn't pay and then she won't have anything.
Adam Johnson, over 12 years ago
At least you know you're instincts were right about the seller. It sounds like they are a bigger mess than their house. I'd contact them in 4 weeks and see if they'll come back to the table. If they do then you know they are truly motivated and you could negotiate some thing better for yourself.
Arthur Botting, over 12 years ago
I Dont Get How People Can screw up and let pipes freeze all the time.. It happens constantly.
James Wise, over 12 years ago
I winterize properties almost daily for mortgage companies. It isn't difficult to do, but it does take some effort to do it right. For a couple hundred dollars, the potential savings can be huge. We recently were sent to a vacant house that hadn't been winterized yet and found major ice inside the house and rushing water. After contacting the water authority to shut it down at the street, they told us that over 100,000 gallons had gone through the meter. That is never a good thing for the interior of a house.
Adam Johnson, over 12 years ago
Or the water bill!
Dawn Anastasi, over 12 years ago
Better conditions in the future. Sounds like you need'em
Billy Hills, over 12 years ago
MY conditions were perfect - the seller screwed up and I walked away. Doesn't get much better than that. I knew enough to check the property before closing and had it already written into my agreement that I could do so even prior suspecting that there might be a problem.
Adam Johnson, over 12 years ago
@AdamJohnson. I thought conditions was the wrong word. But I think the term better luck next time. Was also not the right thing to say. Sorry about the confusion Billy
Billy Hills, over 12 years ago
Now we are on the same page! Luck certainly helps sometimes. We have moved on with other deals and aren't looking back. Happy investing!
Adam Johnson, over 12 years ago