Oddly enough, as all of this unraveled yesterday, I couldn’t help but think of those sellers going it alone right now who have no idea what’s out there waiting for them in the current Phoenix real estate market. Hell, I’ve been in the business for nine years and didn’t start to become concerned until a few days in. But let’s not skip ahead.
Home for sale in El Mirage and we receive a cash offer for $4,000 below asking but clean as a whistle with a 14-day close. Buyers have their inspection performed the very next day and wire the funds to the title company.
And then … nothing.
Official word is the buyer was taking time “to review” the inspection report and decide how to proceed. Granted, there was a 10-day inspection period as set by the boilerplate in the AAR Residential Resale Purchase Contract, but it’s rare not to receive a Buyers Inspection Notice within a couple days of the inspection itself unless the buyer happens to be ordering additional inspections.
Yesterday, on the final day of the inspection period and four days before the set closing date, the other shoe dropped. The buyers were demanding a further $18,500 off the price because of the amount of work the home needed. When the seller was unwilling to drop the price, buyer cancelled and got their earnest deposit back because during the inspection period the buyer can cancel for any reason at his sole discretion.
Here, incidentally, are the items tabbed by the buyers’ inspector to justify the “necessary” repair costs:
- Exterior paint – $1,100
- New air conditioner – $2,500
- Landscaping – $850
- Pressure wash garage floor – $100
- Stucco repairs – $550
- Interior house painting – $3,200
- Cabinet replacement – $300
- All new major appliances – $2,000
- New carpet throughout – $500
- Bathroom renovation – $1,000 per bathroom
- New water heater – $1,000
There were a couple of other things – blinds and such, but no matter.
Some of the above items were completely legitimate. Others, though … considering the seller just painted the entire interior of the house and replaced the carpet in all three bedrooms only five weeks ago … utter b.s.
The air conditioner? It’s 10 years old and in perfect working condition. Nope, says the buyer … has to be replaced.
Water heater? Same deal.
Major appliances? Same deal. (In fact, you can see them for yourself above.)
Bathrooms? I’m sorry, Mr. Buyer, but you want the seller to pay for your decision to redo the bathrooms entirely? Okayfinethenwhatever.
Truth be told, the particulars don’t matter as they’re largely hokum – a spreadsheet used by the investor to justify the screwing he will attempt to give the seller a couple of days before the close, hoping that the seller is so anxious to sell and take the cash that they’ll give in to anything.
Here’s the thing … I’ve got a couple of tricks up my sleeve as well. And I’m telling ya, the next investor who comes in with a contract, legit or not, may learn this one the hard way.
Fool me once, shame on you. Fool me twice …
* * *
While I’m talking about El Mirage, take a look at some of the homes available there. Including a real nice 3-bedroom, 2-bath listed at $125,000.
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