Selling home- Demanding Buyer (Repairs)

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Topic Author
Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu Jun 06, 2019 12:12 pm

rascott wrote:
Thu Jun 06, 2019 11:11 am
ResearchMed wrote:
Thu Jun 06, 2019 10:56 am
Gardener wrote:
Thu Jun 06, 2019 10:44 am
True RM.

And I have that concern as well. But, I do wonder if being present would be more likely to accept the offer. Maybe he does not trust the estimate that I give him, but perhaps being in person, he would see exactly whats going on.

I could get burned with either approach I think.
Do you have serious earnest money in escrow, from the prospective so-called buyer?
And is there or is there not ANY financing contingency?
Or ANY other contingency at this point?
The deadline is soon?

If not, then STOP negotiating. NOW. As in *NOW*.
Either have them close or get the earnest money (this is an example of what it is for!) and relist.
Probably do not have agent contact others, because you want a *different* agent. Period.
Something is wrong about the agent, too, although less so, because their ONLY goal, really, is to get you to close as quickly as possible. Period.

RM

They are clearly still under the inspection contingency period. Seller would not get any EM at this point.

As a non-biased Realtor viewpoint, I don't see anything wrong with this deal, other than a very poor agent that the seller hired.

Seller's home has a major defect. That the buyer didn't walk already is sign they really want the house. He's going to get to move in and then dig up his entire yard.
Thanks Racsott- there is a major defect. Agreed. But, one that I am more than willing to credit the buyer to repair the defect. The septic repair itself will take one day, two days tops.

Topic Author
Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu Jun 06, 2019 12:13 pm

To answer others, buyer has $8,000 in earnest money. Thanks.

Topic Author
Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu Jun 06, 2019 12:16 pm

Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.

Broken Man 1999
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Re: Selling home- Demanding Buyer (Repairs)

Post by Broken Man 1999 » Thu Jun 06, 2019 12:32 pm

Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.
Not sure why that bothers you.

First, they won't be bringing you cash. Either there will be a check from XX, or a check from YY.

So long as they close on time, and either check is good, why do you care?

Are you perhaps looking for a reason to get out of this deal yourself, and hoping the cash/no cash offering allows your exit?

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

HomeStretch
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Re: Selling home- Demanding Buyer (Repairs)

Post by HomeStretch » Thu Jun 06, 2019 12:51 pm

Gardener wrote:
Thu Jun 06, 2019 12:12 pm
The septic repair itself will take one day, two days tops.
Your prior posts said the perc test is 6/10, you will have an repair estimate 6/10 or 6/11 and closing is 6/27. If the repair will only take 1-2 days, any chance the repair company can get the repair done, county could inspect and sign off, and you can reseed the area prior to closing?

I know your preference is to give the buyer a credit. But if it could be completed by closing, it would remove the Buyer’s concern about the situation and the need for escrow.

Jack FFR1846
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Re: Selling home- Demanding Buyer (Repairs)

Post by Jack FFR1846 » Thu Jun 06, 2019 1:00 pm

Has YOUR septic guy dug up the cover, checked, done a test to see how a flush comes in? Done what's needed to say if your system is ok or not? This does not take long. We just happened to have ours pumped out and our neighbor owns the company that did the job. They always inspect and test the entire system and tell me how it looks. From the time the truck pulled up until they left was all of 45 minutes. The cost was $285 if it were not discounted. Have YOUR own test done. Chances are high that the buyer hired someone and asked them to say there's a failure. Sorry I'm jaded, but I would never trust someone that I'm not paying to do the testing.
Bogle: Smart Beta is stupid

rascott
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Re: Selling home- Demanding Buyer (Repairs)

Post by rascott » Thu Jun 06, 2019 1:08 pm

Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.


It's not normal at this point....but not unheard of. You haven't said what type of financing he's using. There are a few lenders around me that claim they can close in 2 weeks, though I haven't seen it in practice.

You said buyer is a business guy....like he owns a business? I mentioned above, he could have a local relationship with a bank that will do a drive-by appraisal and give him a portfolio type loan without much thought..... If he's trying to get a conventional mortgage, that's a different animal to some degree.

But as I've mentioned....that's his issue. Not yours. He is going to show up with the money from wherever it may be on the closing date, or he risks losing his $8k.

My guess is he has the cash, but has decided he'd rather finance. If he can't get it done by closing, he'll just pay you cash and get the cash out of it post-closing. You've still got 3 weeks until closing. A good lender could still do it.

Don't sweat that part. You've got $8k in your pocket if he fails to deliver. But you've got to get clear of this inspection contingency before you've got that.

dknightd
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Re: Selling home- Demanding Buyer (Repairs)

Post by dknightd » Thu Jun 06, 2019 1:25 pm

If I was the seller, I'd fix the septic, then relist. Raise the price since it is has new septic.
Unless I needed the money ASAP. Then I'd probably offer your potential buyer a final offer.
Get it over with. Either they will take it or not. If you want/need to sell the house, bummer for you, good for the buyer.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Thu Jun 06, 2019 2:12 pm

HomeStretch wrote:
Thu Jun 06, 2019 12:51 pm
Gardener wrote:
Thu Jun 06, 2019 12:12 pm
The septic repair itself will take one day, two days tops.
Your prior posts said the perc test is 6/10, you will have an repair estimate 6/10 or 6/11 and closing is 6/27. If the repair will only take 1-2 days, any chance the repair company can get the repair done, county could inspect and sign off, and you can reseed the area prior to closing?

I know your preference is to give the buyer a credit. But if it could be completed by closing, it would remove the Buyer’s concern about the situation and the need for escrow.
This makes a lot of sense to me.
Tell buyer you will have septic repaired and inspected by closing.
I was under the impression this was a weeks long job like when I got my basement waterproofed but if it is a day or two you certainly have time. 17 days. Address it for the $8-12k quoted and be done. Stop feeding the dog.

This works out for you in both ways. If buyer can’t get financing or backs out of deal, you would have to fix to relist. If buyer backs down, you fix to sell. To relist or sell to current buyer all have to go through the same path of fixing the septic.

I feel bad you are out 5k for nonsense like deadbolts and radon mitigation for no radon. Did you already do those repairs?

How long is your contract with the real estate agent? And I say yes to continue showing house. No downside.

Dottie57
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Re: Selling home- Demanding Buyer (Repairs)

Post by Dottie57 » Thu Jun 06, 2019 4:38 pm

Gardener wrote:
Thu Jun 06, 2019 12:10 pm
Thanks Katiestu

Why not continue to show now? He's under contract now and I cannot break it. But, if he hears that other people are looking at the house and submitting offers, it makes him more likely to stop playing games.
Can you actually show the house when it is under contract? Until septic is fixed I would not show because you will need to disclose the problem otherwise.

John Doe 123
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Re: Selling home- Demanding Buyer (Repairs)

Post by John Doe 123 » Thu Jun 06, 2019 4:50 pm

Dottie57 wrote:
Thu Jun 06, 2019 4:38 pm
Gardener wrote:
Thu Jun 06, 2019 12:10 pm
Thanks Katiestu

Why not continue to show now? He's under contract now and I cannot break it. But, if he hears that other people are looking at the house and submitting offers, it makes him more likely to stop playing games.
Can you actually show the house when it is under contract? Until septic is fixed I would not show because you will need to disclose the problem otherwise.
You absolutely can show a house that is under contract. However, almost no buyer is going to waste their time looking at it.

John Doe 123
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Re: Selling home- Demanding Buyer (Repairs)

Post by John Doe 123 » Thu Jun 06, 2019 4:53 pm


This works out for you in both ways. If buyer can’t get financing or backs out of deal, you would have to fix to relist. If buyer backs down, you fix to sell. To relist or sell to current buyer all have to go through the same path of fixing the septic.
I think this is great advice. I would do the repair ASAP and get it over with.

Topic Author
Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Fri Jun 07, 2019 5:01 am

Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Fri Jun 07, 2019 5:09 am

Three of the best options I think that I have based on advice/guidance received here:

1. Accept offer from buyer as is (credit buyer amount of estimate PLUS $3k in escrow. W/this buyer, I believe buyer would find a way to spend that $3k)

2. Counter offer and credit buyer amount of estimate PLUS $1k in escrow. Again, I'd assume the $1k would be gone.

3. Reject buyer's counter offer, but allow buyer to be present. That is, I would still credit buyer the full amount of written estimate to repair the septic/drain field.
- Would also add in my response:
In order to protect sellers interest and maximize opportunity in a strong sellers market, sellers have decided to continue communication with initial losing bidder and open the home up to back up offers until septic amendment is accepted and financing is approved.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Fri Jun 07, 2019 5:32 am

Gardener wrote:
Fri Jun 07, 2019 5:01 am
Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.
The appraisal can be done any time. Your agent is just trying to lose the deal. Would note the financing or the appraisal influence any decision making.i would take what your realtor says with a grain of salt at this point.

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Watty
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Re: Selling home- Demanding Buyer (Repairs)

Post by Watty » Fri Jun 07, 2019 5:43 am

Gardener wrote:
Fri Jun 07, 2019 5:09 am
- Would also add in my response:
In order to protect sellers interest and maximize opportunity in a strong sellers market, sellers have decided to continue communication with initial losing bidder and open the home up to back up offers until septic amendment is accepted and financing is approved.
Even in a strong market I doubt that you are likely to get any serious offers until the septic system is fixed since there are a lot of unknowns.

I would look at rejecting the offer and then waiting to put the house back on the market once the new septic system is installed. If the current buyer is still interested then you can work out a deal then.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Fri Jun 07, 2019 5:50 am

Gardener wrote:
Fri Jun 07, 2019 5:09 am
Three of the best options I think that I have based on advice/guidance received here:

1. Accept offer from buyer as is (credit buyer amount of estimate PLUS $3k in escrow. W/this buyer, I believe buyer would find a way to spend that $3k)

2. Counter offer and credit buyer amount of estimate PLUS $1k in escrow. Again, I'd assume the $1k would be gone.

3. Reject buyer's counter offer, but allow buyer to be present. That is, I would still credit buyer the full amount of written estimate to repair the septic/drain field.
- Would also add in my response:
In order to protect sellers interest and maximize opportunity in a strong sellers market, sellers have decided to continue communication with initial losing bidder and open the home up to back up offers until septic amendment is accepted and financing is approved.

I like option 3. You’ve spent a considerable amount of money, time and effort to sell this house for this particular buyer. Enough is enough.

You allow the financing addendum. Whether or not they are technically allowed per your realtor the fact that they added this into the addendum means they recognize it’s a change of plan otherwise why mention it. You do not allow the escrow addendum. Don’t give in to everything. Use your leverage.

I would also make sure buyer signs this prior to their presence at the perc test. Doing so may make them less likely to drive up the repair of the estimate. I think crediting the repair of the estimate is generous because you could have said here’s 5k and you handle it with zero idea of the scope of the problem. At least you are arming them with quite a bit of knowledge so they know the deal is fair. I really don’t like any additional amount in escrow. You have really worked hard to address all these inspection issues so the home should be as good as new for them.

Also not that this is relevant since they are now financing they should have cash on hand to deal with any overages.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Fri Jun 07, 2019 6:03 am

Watty wrote:
Fri Jun 07, 2019 5:43 am
Gardener wrote:
Fri Jun 07, 2019 5:09 am
- Would also add in my response:
In order to protect sellers interest and maximize opportunity in a strong sellers market, sellers have decided to continue communication with initial losing bidder and open the home up to back up offers until septic amendment is accepted and financing is approved.
Even in a strong market I doubt that you are likely to get any serious offers until the septic system is fixed since there are a lot of unknowns.

I would look at rejecting the offer and then waiting to put the house back on the market once the new septic system is installed. If the current buyer is still interested then you can work out a deal then.
But buyer doesn’t know that. And the property is not screaming broken septic tank. It will only be on the sellers disclosure after a potential buyer expresses interest. Apparently the house shows well with 3 offers in 7!days.

Trapper
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Re: Selling home- Demanding Buyer (Repairs)

Post by Trapper » Fri Jun 07, 2019 6:37 am

I believe you are making several poor decisions.
1. Negotiating a price on the septic and leaving decision in hands of buyer when you have no idea the scope and cost of repair.
2. Agreeing to a financing contingency. Four weeks from now I can see your "buyer" will use failing to get financing as another excuse.
3. Keeping your current realtor.

To address your problems:
1. Do not agree to current buyer proposal. Get the septic looked at and scope of work. You control and make decisions based on inspection results.
2. Go silent.
3. Generally in my neck of the woods, the real estate listing contract is with the broker, not the realtor. Have a sit down meeting with the broker and tell him you need the contract reassigned to one of his top three agents. The broker wants to close deals, has their reputation to protect, & knows the best agents in his office.

Review your contract obligations to date, and go silent on anything not required.

pennywise
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Re: Selling home- Demanding Buyer (Repairs)

Post by pennywise » Fri Jun 07, 2019 7:09 am

Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.
I'm confused-why does it matter how or where the buyer is getting the money? As others have said as long as the closing date is met, when you close a real estate deal the seller always gets 'cash' ie full payment for the property regardless of whether the buyer pulled it out from under the mattress that morning or it was wired in a nansecond after the final signature was completed. It's really irrelevant to the seller so why is this such a sore point with OP? Other than if the buyer is now delaying the sale process to get financing, what does it matter to the seller where the cash comes from as long as it hits his or her bank account at closing?

pennywise
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Re: Selling home- Demanding Buyer (Repairs)

Post by pennywise » Fri Jun 07, 2019 7:12 am

Gardener wrote:
Fri Jun 07, 2019 5:01 am
Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.
I thought there was a no-appraisal contingency in the contract. So according to that, it doesn't matter if the appraisal doesn't come up to sale price, you are still under contract.

This is all very murky and getting more confusing the more OP is explaining the delays...

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ResearchMed
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Re: Selling home- Demanding Buyer (Repairs)

Post by ResearchMed » Fri Jun 07, 2019 7:37 am

pennywise wrote:
Fri Jun 07, 2019 7:12 am
Gardener wrote:
Fri Jun 07, 2019 5:01 am
Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.
I thought there was a no-appraisal contingency in the contract. So according to that, it doesn't matter if the appraisal doesn't come up to sale price, you are still under contract.

This is all very murky and getting more confusing the more OP is explaining the delays...
Even if there is still an inspection contingency in place from the offer (which I apparently missed earlier), there is STILL bad faith by PROSPECTIVE buyer (these people are not yet actual buyers!) for not arranging the appraisal at the start. To wait more than a month without having done anything to arrange it? And combine that with last minute and totally unnecessary "financing" when it was a "cash" offer?

Whether there can/cannot "be an appraisal until the septic is fixed" - I don't know the regs wherever OP is.

But as I mentioned above, we made an offer with NO financing contingency. Yes, we had some lender appraisers in, within less that a week, that was ALL DONE, along with the inspection.
And the seller never heard another peep about our financing. That was "on us", not them, and they didn't worry (once re-assured by our agent, who knew our circumstances). We did NOT suddenly announce the financing within a short time of the planned closing, when timing might be too tight.

The "buyer" may well use any [late] financing delay to demand more... delays.

And with only $8k earnest money, OP will probably come out behind with the extra carrying costs from re-listing, and who knows if the next offers will be as high THIS time. It can probably be learned that there was an offer that fell through, etc. It might even be publicly and easily available right on Zillow (it is in our area, and surprisingly fast).

RM
This signature is a placebo. You are in the control group.

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8foot7
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Re: Selling home- Demanding Buyer (Repairs)

Post by 8foot7 » Fri Jun 07, 2019 7:37 am

Trapper wrote:
Fri Jun 07, 2019 6:37 am
I believe you are making several poor decisions.
1. Negotiating a price on the septic and leaving decision in hands of buyer when you have no idea the scope and cost of repair.
2. Agreeing to a financing contingency. Four weeks from now I can see your "buyer" will use failing to get financing as another excuse.
3. Keeping your current realtor.

To address your problems:
1. Do not agree to current buyer proposal. Get the septic looked at and scope of work. You control and make decisions based on inspection results.
2. Go silent.
3. Generally in my neck of the woods, the real estate listing contract is with the broker, not the realtor. Have a sit down meeting with the broker and tell him you need the contract reassigned to one of his top three agents. The broker wants to close deals, has their reputation to protect, & knows the best agents in his office.

Review your contract obligations to date, and go silent on anything not required.
Gracious yes. Kill the deal man. And get a new agent. There’s really nothing left to say.

Dottie57
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Re: Selling home- Demanding Buyer (Repairs)

Post by Dottie57 » Fri Jun 07, 2019 7:44 am

8foot7 wrote:
Fri Jun 07, 2019 7:37 am
Trapper wrote:
Fri Jun 07, 2019 6:37 am
I believe you are making several poor decisions.
1. Negotiating a price on the septic and leaving decision in hands of buyer when you have no idea the scope and cost of repair.
2. Agreeing to a financing contingency. Four weeks from now I can see your "buyer" will use failing to get financing as another excuse.
3. Keeping your current realtor.

To address your problems:
1. Do not agree to current buyer proposal. Get the septic looked at and scope of work. You control and make decisions based on inspection results.
2. Go silent.
3. Generally in my neck of the woods, the real estate listing contract is with the broker, not the realtor. Have a sit down meeting with the broker and tell him you need the contract reassigned to one of his top three agents. The broker wants to close deals, has their reputation to protect, & knows the best agents in his office.

Review your contract obligations to date, and go silent on anything not required.
Gracious yes. Kill the deal man. And get a new agent. There’s really nothing left to say.
I agree. Stop negotiating.

rascott
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Re: Selling home- Demanding Buyer (Repairs)

Post by rascott » Fri Jun 07, 2019 7:45 am

Gardener wrote:
Fri Jun 07, 2019 5:01 am
Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.
I again don't understand why you keep bringing up the financing. You signed a cash offer with no appraisal contingency. Unless there is an appraisal contingency in the contract that you are not telling us about.

You need to set hard boundaries and be very clear here that you are done with this and are ready to walk away. Make your final offer number for a seller credit to the buyer. I don't like any of the options you presented above as options. You guys are way over-complicating this. Why mess with an escrow? Either buyer wants the house and wants to deal with the risk/unknowns of the fixing the septic....or they don't. If they don't, take it off the market, fix the septic and relist.

So you have two options. Come up with your number you are willing to give and be done one way or another.

My last home I purchased had about $10-12k in major outdoor masonry work repairs needed (chimney, retaining wall, etc)....I had seller get estimates from a reputable masonry company that I trusted...then we both had a number to work from. They were totally unwilling/unable to pay for the full $10-12k....so it just became a dollar negotiation, until we came close to splitting the difference. And I had all the repair work done myself after closing.

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ResearchMed
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Re: Selling home- Demanding Buyer (Repairs)

Post by ResearchMed » Fri Jun 07, 2019 7:55 am

rascott wrote:
Fri Jun 07, 2019 7:45 am
Gardener wrote:
Fri Jun 07, 2019 5:01 am
Here is where because buyer is financing it becomes an issue:

Because buyer wants to finance, an appraisal is needed. Per my agent, an appraisal cannot be completed until septic amendment is signed. Financing complicates things.

And since I'm not sure that licensed septic can schedule out and get the work done prior to 6/27, I cannot propose completing the work as an option. That's why financing threw a wrinkle in to everything. I asked septic guy if the repair could be complete by 6/27, but he said he won't know until he meets with the county and the route of repair is determined.
I again don't understand why you keep bringing up the financing. You signed a cash offer with no appraisal contingency. Unless there is an appraisal contingency in the contract that you are not telling us about.

You need to set hard boundaries and be very clear here that you are done with this and are ready to walk away. Make your final offer number for a seller credit to the buyer. I don't like any of the options you presented above as options. You guys are way over-complicating this. Why mess with an escrow? Either buyer wants the house and wants to deal with the risk/unknowns of the fixing the septic....or they don't. If they don't, take it off the market, fix the septic and relist.

So you have two options. Come up with your number you are willing to give and be done one way or another.
I agree strongly with rascott and Dottie57.

... except IF it speeds this sale along (is this even possible?), then escrow an amount that you are prepared to lose. Let the "buyer" feel victorious about that one thing. Then SELL it.
OR kill the deal ASAP based upon continuing attempts to violate the P&S terms (per our understanding) and that's that.

Do NOT give one more thing, and make it clear that you ARE standing by the P&S.
With real estate in most (all?) locales, nothing other than written agreements are binding, unlike in almost any other area.
Don't negotiate any further about anything. "Buyer" takes it as they offered, or not. And do NOT allow any extension to closing date (I predict a series of delays requested).

And I remain clueless about what the agent is/is not doing, and *why*.

OP: WHY are you still going round and round like this?

RM
This signature is a placebo. You are in the control group.

vested1
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Re: Selling home- Demanding Buyer (Repairs)

Post by vested1 » Fri Jun 07, 2019 8:02 am

pennywise wrote:
Fri Jun 07, 2019 7:09 am
Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.
I'm confused-why does it matter how or where the buyer is getting the money? As others have said as long as the closing date is met, when you close a real estate deal the seller always gets 'cash' ie full payment for the property regardless of whether the buyer pulled it out from under the mattress that morning or it was wired in a nansecond after the final signature was completed. It's really irrelevant to the seller so why is this such a sore point with OP? Other than if the buyer is now delaying the sale process to get financing, what does it matter to the seller where the cash comes from as long as it hits his or her bank account at closing?
As stated earlier on this page, the difference is the impact of the appraisal on the financing. If the property appraises low the buyer has more leverage to ask for a lower price, and is conveniently provided with a reason for doing so. Of course, if the buyer is feeling magnanimous they can always pay the difference between the appraisal and the asking price, but rarely do so after finding themselves in a stronger bargaining position.

A cash transaction eliminates the need for an appraisal, even though one could be performed. Additionally, different types of loans have different requirements concerning the responsibility of the seller to repair items identified on home or municipal inspections. A VA loan for instance requires the seller to fix all section 1 and 2 identified defects before the loan is approved, and won't even allow a seller to pay the buyer the cost of repairing the defect by reducing the asking price.

HomeStretch
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Re: Selling home- Demanding Buyer (Repairs)

Post by HomeStretch » Fri Jun 07, 2019 8:14 am

Dottie57 wrote:
Fri Jun 07, 2019 7:44 am
8foot7 wrote:
Fri Jun 07, 2019 7:37 am
Trapper wrote:
Fri Jun 07, 2019 6:37 am
I believe you are making several poor decisions.
1. Negotiating a price on the septic and leaving decision in hands of buyer when you have no idea the scope and cost of repair.
2. Agreeing to a financing contingency. Four weeks from now I can see your "buyer" will use failing to get financing as another excuse.
3. Keeping your current realtor.

To address your problems:
1. Do not agree to current buyer proposal. Get the septic looked at and scope of work. You control and make decisions based on inspection results.
2. Go silent.
3. Generally in my neck of the woods, the real estate listing contract is with the broker, not the realtor. Have a sit down meeting with the broker and tell him you need the contract reassigned to one of his top three agents. The broker wants to close deals, has their reputation to protect, & knows the best agents in his office.

Review your contract obligations to date, and go silent on anything not required.
Gracious yes. Kill the deal man. And get a new agent. There’s really nothing left to say.
I agree. Stop negotiating.
+3. Take a break from talking about this with realtor, friends, forum, etc. Focus on getting your septic issue resolved ASAP to make your property more easily saleable to this buyer or any other buyer.

Call the county inspector yourself to secure his/her availability to inspect septic repair in June. Then call the repair company and do what you need to do (even if it’s promising a cash bonus upon completion) to get on the repair schedule and lock in a date with inspector in June.

Make it happen so you can move on.

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ResearchMed
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Re: Selling home- Demanding Buyer (Repairs)

Post by ResearchMed » Fri Jun 07, 2019 8:33 am

vested1 wrote:
Fri Jun 07, 2019 8:02 am
pennywise wrote:
Fri Jun 07, 2019 7:09 am
Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.
I'm confused-why does it matter how or where the buyer is getting the money? As others have said as long as the closing date is met, when you close a real estate deal the seller always gets 'cash' ie full payment for the property regardless of whether the buyer pulled it out from under the mattress that morning or it was wired in a nansecond after the final signature was completed. It's really irrelevant to the seller so why is this such a sore point with OP? Other than if the buyer is now delaying the sale process to get financing, what does it matter to the seller where the cash comes from as long as it hits his or her bank account at closing?
As stated earlier on this page, the difference is the impact of the appraisal on the financing. If the property appraises low the buyer has more leverage to ask for a lower price, and is conveniently provided with a reason for doing so. Of course, if the buyer is feeling magnanimous they can always pay the difference between the appraisal and the asking price, but rarely do so after finding themselves in a stronger bargaining position.

A cash transaction eliminates the need for an appraisal, even though one could be performed. Additionally, different types of loans have different requirements concerning the responsibility of the seller to repair items identified on home or municipal inspections. A VA loan for instance requires the seller to fix all section 1 and 2 identified defects before the loan is approved, and won't even allow a seller to pay the buyer the cost of repairing the defect by reducing the asking price.
Your last section above is irrelevant for OP. Offer was for CASH.
IF the "buyer" wants to finance, then any, er, difficulties are entirely on them, not on seller. "Buyer" should have thought about that before committing to a cash offer rather than trying to back out of that portion of the P&S after it is signed/accepted.

The only issue now should be if there are any legalities about the condition of septic in order to sell.
Whether Loan Type A has any such restrictions is ... too bad about that...

RM
This signature is a placebo. You are in the control group.

rascott
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Re: Selling home- Demanding Buyer (Repairs)

Post by rascott » Fri Jun 07, 2019 8:36 am

ResearchMed wrote:
Fri Jun 07, 2019 8:33 am
vested1 wrote:
Fri Jun 07, 2019 8:02 am
pennywise wrote:
Fri Jun 07, 2019 7:09 am
Gardener wrote:
Thu Jun 06, 2019 12:16 pm
Rascott- buyer came under contract at the end of April with the cash offer.

Only after we negotiated all general repairs and gone back and forth with septic, did he disclose that he would be financing. You see a lot more of these in a week than I will in a lifetime, but is that common? We accepted the offer over another under the guise that he'd be paying cash.
I'm confused-why does it matter how or where the buyer is getting the money? As others have said as long as the closing date is met, when you close a real estate deal the seller always gets 'cash' ie full payment for the property regardless of whether the buyer pulled it out from under the mattress that morning or it was wired in a nansecond after the final signature was completed. It's really irrelevant to the seller so why is this such a sore point with OP? Other than if the buyer is now delaying the sale process to get financing, what does it matter to the seller where the cash comes from as long as it hits his or her bank account at closing?
As stated earlier on this page, the difference is the impact of the appraisal on the financing. If the property appraises low the buyer has more leverage to ask for a lower price, and is conveniently provided with a reason for doing so. Of course, if the buyer is feeling magnanimous they can always pay the difference between the appraisal and the asking price, but rarely do so after finding themselves in a stronger bargaining position.

A cash transaction eliminates the need for an appraisal, even though one could be performed. Additionally, different types of loans have different requirements concerning the responsibility of the seller to repair items identified on home or municipal inspections. A VA loan for instance requires the seller to fix all section 1 and 2 identified defects before the loan is approved, and won't even allow a seller to pay the buyer the cost of repairing the defect by reducing the asking price.
Your last section above is irrelevant for OP. Offer was for CASH.
IF the "buyer" wants to finance, then any, er, difficulties are entirely on them, not on seller. "Buyer" should have thought about that before committing to a cash offer rather than trying to back out of that portion of the P&S after it is signed/accepted.

The only issue now should be if there are any legalities about the condition of septic in order to sell.
Whether Loan Type A has any such restrictions is ... too bad about that...

RM
+1

Correct!

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Re: Selling home- Demanding Buyer (Repairs)

Post by srt7 » Fri Jun 07, 2019 8:54 am

researcher wrote:
Thu May 16, 2019 7:46 am

You're making this way too difficult for yourself.

Given what you've described (hot seller's market, multiple offers, very interested buyer), this is what I would do...
- Provide the buyer with the written estimates for the $5200 laundry list of repairs and the $10K septic repair.
- Offer to cover all of the miscellaneous repairs + 50% of the septic repair.
- Then simply reduce the home price by $10,200 and let the buyer make the repairs.

As the seller, I wouldn't want to deal with the time/mess/headache/logistics of making all these repairs. What if the buyer has the house re-inspected and doesn't like how some of the repairs were done?

As the buyer, I would want to handle these repairs myself, to make sure they are done to my standards. The seller is motivated to do them as cheaply and quickly as possible.
I second this plan. This is a smart way of meeting them in the middle while also making it a win-win for everyone.

At that point if the buyer tries to negotiate etc. then walk away. Some people just love to squeeze it out and are still never happy. No reason to do business with that kind.
I can't think of anything more luxurious than owning my time. - remomnyc

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Re: Selling home- Demanding Buyer (Repairs)

Post by indexfundfan » Fri Jun 07, 2019 9:18 am

I like the idea of reducing the price (instead of a credit), because

1) it reduces any transfer tax
2) it reduces the commission
3) it makes it less likely that it does not appraise to full value (yes, I know there is not supposed to be a financing contingency)
My signature has been deleted.

rascott
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Re: Selling home- Demanding Buyer (Repairs)

Post by rascott » Fri Jun 07, 2019 9:26 am

indexfundfan wrote:
Fri Jun 07, 2019 9:18 am
I like the idea of reducing the price (instead of a credit), because

1) it reduces any transfer tax
2) it reduces the commission
3) it makes it less likely that it does not appraise to full value (yes, I know there is not supposed to be a financing contingency)
Yep good point. For a cash transaction, just drop the selling price and save some money.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Mon Jun 10, 2019 12:08 pm

Quick update on the septic adventure.

Septic perk test was done this morning. Results were excellent- soil was great, dug down 15 feet and still did not hit any water, which I understand now is a good thing. Buyer's spouse was there as well with septic guy and county inspector.

Septic guy said that he would be able to install this weekend if that is what we chose on 6/15. We close on 6/27. I will get the written estimate tonight or tomorrow morning. Septic guy says that he ALMOST NEVER has an actual price exceed his estimate as he has been in the business a long time. And frankly, I do trust the guy, having now met him in person and exchanged 4-5 phone calls with him, as well as being referred by someone else I trust.

However, based on what I am reading here, I think the smart thing is to just reduce the amount by written estimate (NO ESCROW) and if buyer takes it, great. If not, move on.

Only concern I have is that while I will pay for the perk test of $500, I think the septic guy does deserve the business and would feel badly if buyer chose to go with someone else. I did openly express this concern with septic guy. And I did tell buyers wife that this particular septic guy stood above the rest of the folks I called because he was responsive, came recommended, and is also very local, only a few minutes up the road. Anyway, not sure if there is anything else I can reasonably do to help the septic guy earn the business since he's already put in some leg work.

Thanks and I'll keep everyone posted. Appreciate any input, advice on the above if you have any. Feel free to check my thinking.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Mon Jun 10, 2019 12:15 pm

Also, I am pushing my agent to allow appraisal only after septic addendum is signed.

I don't want the chance of a low bank appraisal (even though its NOT appraisal contingent- meaning buyer still has to go through with sale even if does not appraise for accepted value) to impact the repair of septic negotiation.

quantAndHold
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Re: Selling home- Demanding Buyer (Repairs)

Post by quantAndHold » Mon Jun 10, 2019 12:22 pm

Gardener wrote:
Mon Jun 10, 2019 12:15 pm
Also, I am pushing my agent to allow appraisal only after septic addendum is signed.

I don't want the chance of a low bank appraisal (even though its NOT appraisal contingent- meaning buyer still has to go through with sale even if does not appraise for accepted value) to impact the repair of septic negotiation.

Keep in mind that if you do that, the buyer can claim that the late appraisal is why they won’t be able to close by 6/27.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Mon Jun 10, 2019 12:33 pm

Gardener wrote:
Mon Jun 10, 2019 12:08 pm
Quick update on the septic adventure.

Septic perk test was done this morning. Results were excellent- soil was great, dug down 15 feet and still did not hit any water, which I understand now is a good thing. Buyer's spouse was there as well with septic guy and county inspector.

Septic guy said that he would be able to install this weekend if that is what we chose on 6/15. We close on 6/27. I will get the written estimate tonight or tomorrow morning. Septic guy says that he ALMOST NEVER has an actual price exceed his estimate as he has been in the business a long time. And frankly, I do trust the guy, having now met him in person and exchanged 4-5 phone calls with him, as well as being referred by someone else I trust.

However, based on what I am reading here, I think the smart thing is to just reduce the amount by written estimate (NO ESCROW) and if buyer takes it, great. If not, move on.

Only concern I have is that while I will pay for the perk test of $500, I think the septic guy does deserve the business and would feel badly if buyer chose to go with someone else. I did openly express this concern with septic guy. And I did tell buyers wife that this particular septic guy stood above the rest of the folks I called because he was responsive, came recommended, and is also very local, only a few minutes up the road. Anyway, not sure if there is anything else I can reasonably do to help the septic guy earn the business since he's already put in some leg work.

Thanks and I'll keep everyone posted. Appreciate any input, advice on the above if you have any. Feel free to check my thinking.
Any reason not to just do it yourself - If he can get it done on the 15th? If buyer re-negs then it’s done and ready to list.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Mon Jun 10, 2019 12:46 pm

Thanks veindoc.

It is an option, but I think I rather just take off the purchase price because then buyer can have it done to his satisfaction. What if he does not like that trucks made lines, left dirt marks on the driveway, knocked down a bush in the process? It takes that variable away.

veindoc
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Mon Jun 10, 2019 1:17 pm

Sounds reasonable. Instead of credit you can lower purchase price as previously suggested reducing realtors commission which saves you 6% of the 10k or so and less for buyer to mortgage which they may appreciate.

Trapper
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Re: Selling home- Demanding Buyer (Repairs)

Post by Trapper » Mon Jun 10, 2019 1:18 pm

Veindoc said, “Any reason not to just do it yourself - If he can get it done on the 15th? If buyer re-negs then it’s done and ready to list.”

“Sounds reasonable. Instead of credit you can lower purchase price as previously suggested reducing realtors commission which saves you 6% of the 10k or so and less for buyer to mortgage which they may appreciate.”

I agree with veindoc and think this is valuable counsel.
Last edited by Trapper on Mon Jun 10, 2019 1:20 pm, edited 1 time in total.

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Re: Selling home- Demanding Buyer (Repairs)

Post by Dottie57 » Mon Jun 10, 2019 1:19 pm

Gardener wrote:
Mon Jun 10, 2019 12:46 pm
Thanks veindoc.

It is an option, but I think I rather just take off the purchase price because then buyer can have it done to his satisfaction. What if he does not like that trucks made lines, left dirt marks on the driveway, knocked down a bush in the process? It takes that variable away.
Your buyer is going to think the same way - want everything fixed and neat before settlement.

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Re: Selling home- Demanding Buyer (Repairs)

Post by Jack FFR1846 » Mon Jun 10, 2019 1:27 pm

I'd be asking my agent about getting some backup offers lined up. Knowing that the septic will be recently redone adds value. Who knows? Someone offers $20k over asking and then play hard ball with this clown of a buyer whose been running you in circles.

Personally, I would sign nothing new with this buyer.
Bogle: Smart Beta is stupid

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Mon Jun 10, 2019 3:18 pm

Thanks everyone. And yes, my agent has told the other agent that we will be accepting back up offers up until settlement.

This is what my offer is to buyer. Just waiting on written estimate from my septic guy.

Buyer to reduce price of home price by $x, which is the exact amount of written estimate (please see attached estimate provided by licensed installer and form provided by the county) . Appraisal can occur any time after addendum is signed by all parties.

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beyou
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Re: Selling home- Demanding Buyer (Repairs)

Post by beyou » Mon Jun 10, 2019 4:46 pm

Home ownership is such a hassle. Not sure which is worse, continuing to maintain my home in old age,
or selling it and moving to a rental. The only thing I would rule out now is selling and buying a new home !

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu Jun 13, 2019 4:26 pm

I offered buyer the amount of written estimate $13,500 (be reduced from the purchase price) and provided a copy of the written estimate. Buyer came back with this:

It is unfortunate that the septic field requires replacement and more so that it is apparently an unusual
installation.
I can offer one of two solutions.
1. Sellers have the field replaced- I would have to approve the contractor and materials used. I have
spoken to two contractors and both have cautioned me about low bids on this type of field installation.
Mainly from cheap pumps, not using certified electricians for the electrical work and not using the
highest capacity tanks for the job. I have no intention of having inferior equipment used at any stage of
the job. Further, $2000 would be set aside at settlement for reseeding. This occurs after a period of
time when the dirt has settled and fresh dirt is placed to level the area and then seeded. Further, if any
damage occurs to the drive way it will be the seller's responsibility to fix same. Damage to the
surrounding area, not from the septic field itself, from the installation shall be leveled and seeded.
Settlement will be delayed so that Seller has adequate time to have installation done.
2. I do the job after settlement- $22k is set aside at settlement. I will have the same premium level field
installed, the area leveled after a period of time and reseeded. Should driveway be damaged from
contractors equipment the repairs will come out the escrowed funds. Funds not used will be returned
with copies of checks paid to contractors to document the use of the funds for this purpose.
Last edited by Gardener on Thu Jun 13, 2019 4:44 pm, edited 2 times in total.

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AerialWombat
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Re: Selling home- Demanding Buyer (Repairs)

Post by AerialWombat » Thu Jun 13, 2019 4:34 pm

No. No. No. And no.

I will repeat what I write upthread: WALK.

You knew this buyer was going to continue being a problem child. I don’t comprehend why you continue to play his game.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu Jun 13, 2019 4:34 pm

Talked to my agent.

Said she completely understood if we wanted to walk.

She said that she was not sure that we would get that $475k offer again, but that our house would likely get under contract quickly.

My concerns about relisting are as follows:
Yard will not look the best bc we would have now put the septic in.
Not sure how much home would appraise for.
Have a newer neighbor that put up a bit of an eye sore of a chicken house (were in the country so not completely out of place)
Place would be empty and may not show as well (listing agent said she would stage it, but not have it fully so.?)

bampf
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Re: Selling home- Demanding Buyer (Repairs)

Post by bampf » Thu Jun 13, 2019 4:39 pm

Gardener wrote:
Thu Jun 13, 2019 4:26 pm
I offered buyer the amount of written estimate $13,500 (be reduced from the purchase price) and provided a copy of the written estimate. Seller came back with this:

It is unfortunate that the septic field requires replacement and more so that it is apparently an unusual
installation.
I can offer one of two solutions.
1. Sellers have the field replaced- I would have to approve the contractor and materials used. I have
spoken to two contractors and both have cautioned me about low bids on this type of field installation.
Mainly from cheap pumps, not using certified electricians for the electrical work and not using the
highest capacity tanks for the job. I have no intention of having inferior equipment used at any stage of
the job. Further, $2000 would be set aside at settlement for reseeding. This occurs after a period of
time when the dirt has settled and fresh dirt is placed to level the area and then seeded. Further, if any
damage occurs to the drive way it will be the seller's responsibility to fix same. Damage to the
surrounding area, not from the septic field itself, from the installation shall be leveled and seeded.
Settlement will be delayed so that Seller has adequate time to have installation done.
2. I do the job after settlement- $22k is set aside at settlement. I will have the same premium level field
installed, the area leveled after a period of time and reseeded. Should driveway be damaged from
contractors equipment the repairs will come out the escrowed funds. Funds not used will be re
At some point you just walk away. Absolutely certain that you wont be done with this guy when you sell. Get the septic fixed, relist. Move on. Sorry you have to deal with this. I had the same sort of situation. I told the buyer that he could buy the house or not as it was. If he didn't want it, I was fine with that. I also told my agent to remember who the heck he worked for. Do you really want to deal with the lawsuit 6 months after you close because the buyer claims you didn't disclose something? My suggestion is that you either be prepared for a long drawn out situation or you just pack it in and tell him to lump it. If he comes back to you, tell him the new price is $15K more because of the aggro he has caused you and fixes the septic. <Even then I wouldn't sell to him>. I'm sorry for your stress, but, there are times when it is just better to walk away.

--Bampf

HomeStretch
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Re: Selling home- Demanding Buyer (Repairs)

Post by HomeStretch » Thu Jun 13, 2019 4:40 pm

Gardener wrote:
Thu Jun 13, 2019 4:26 pm
I offered buyer the amount of written estimate $13,500 (be reduced from the purchase price) and provided a copy of the written estimate. Seller came back with this:
Do you mean “Buyer” came back with this?

Not unexpected that Buyer would not accept your septic repair proposal and would want the landscape restored to pre-repair condition.

Septics requiring repair are a big unknown to any buyer. Your repair guy could have done the repair on June 15(?) prior to closing. At this point, suggest you schedule the repair asap, tell Buyer you are having septic/landscape repaired and to advise within 24 hours whether he wants to go to closing without any septic contingencies as scheduled or not. If he walks, relist and let the backup buyers know it’s back on the market.

Best of luck!

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Re: Selling home- Demanding Buyer (Repairs)

Post by BeneIRA » Thu Jun 13, 2019 4:41 pm

AerialWombat wrote:
Thu Jun 13, 2019 4:34 pm
No. No. No. And no.

I will repeat what I write upthread: WALK.

You knew this buyer was going to continue being a problem child. I don’t comprehend why you continue to play his game.
I had a big response about sunk cost fallacy and that the $475,000 isn't real because it comes with more strings than an orchestra, but I think this quoted comment about sums it up. HomeStretch's comment I also could go for.

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