Buyer is driving me nuts. Should I end contract?

Question

Hello BP fam;

I am currently selling my California mountain home. It was appraised for $406k but due to it needing deck and roof repair, and wanting to get a quick sale, I listed it way below market value @ 320k. I believe this was a mistake. Buyer not only haggled me on the price for a whole week resulting in me lowering it another 10k, but now wants me to either repair the roof or the decks (both of which i got an estimate for 10k ea) but this is after I listed it AS IS!

With as much money as I'm losing on this deal, I might as well have just sold to investors! ( no offense) I'm actually quite desperate to get rid of this home and begin my own real estate investing journey but this situation is putting a huge damper on things. Should I just drop out of this deal and relist the home at the value where it should be so I can afford to make a repair if needed or just bite the bullet, repair the decks and then try to haggle the price down on my next investment to make up for this? lol.

Yours Truly (frustrated)

Kimberly

Joel Case · Answer

Refuse the buyer's wishes and let them drop out if they like. If it were me and they were to drop out, I would bite the bullet, fix the deck and roof, then relist at the appropriate market price.

Mike Dymski · Answer

Start your real estate journey now.  Fix the deck and roof, sell at 406k, and net 66k more in a very short period of time.

Patricia Steiner · Answer

Geez...this sure isn't what I would have recommended you do. But start with your right to cancel a contract in the state of California:  "The cancellation provisions are found in Paragraphs 14C (1) and (2), and in Paragraph 14E of the CA-RPA. Regardless of the reason, the seller must give some type of notice to the buyer, however (either a Notice to Perform or a Demand to Close Escrow) before the seller can cancel."  Check your contract and make sure you have this language in it.

If so, I recommend that you cancel the contract immediately; to do so, you will need to have your realtor prepare a cancellation addendum with you will sign, get the buyer to sign, before sending it to the title agent for return of the buyer's escrow.

Next, take the property off of the market.  You can do a "temporarily off market (TOM)" status or just withdraw it.  Then, you need to do this:  WHAT IS YOUR HOUSE WORTH AS IS?  You can determine this through comparable sales, a Broker's Price Opinion, or engage an appraisal.  You don't sell without knowing what it is worth...and once you set the price and list it AS IS - don't start deducting for repairs; it's AS IS at that price.  You're undermining yourself.

Also, you can blame this on the realtor but you went on this ride.  The realtor is required to present all offers but a lot of stupid gets presented.  Before you list, you and the realtor must be on the same side and the realtor gets to deal with the buyers' chaos - not you.  The realtor represents the property and you - so make sure that she knows that you're not giving the property away and you're not negotiating repair costs.

Please consider bolting from this madness. If you decide to change realtors, don't be surprised if you find out that you can't without having to compensate that realtor too. Review your listing agreement to determine how to terminate cleanly.

Real estate transactions are based on conflict and most of it is needless conflict.  Set your parameters, know what your property is worth, and detach from all the manufactured chaos.  Bolt!

Kevin Sobilo · Answer

@Kimberly Beltran, I really don't understand your thinking.

You mention wanting to begin your real estate investment journey, BUT you are very upset and frustrated with trying to work this deal. Its not personal and its not always easy, but this is the work of an investor. So, if you want to be an investor, try to work on your mindset.

Whether it was your primary residence or not, money is money. In fact as a primary residence you have a built in tax incentive for any profit.

If you want to be in investor, think of this as your first investment and make and execute a plan with that in mind.

You listed at $320k. How much do you think you could sell it for if you fixed the roof and decks? $400k or more? Any other upgrades make sense? Why not consider maximizing what you have before you sell especially in light of the tax incentive as your primary residence.

Andrew Syrios · Answer

I would hold your ground at the least. Tell the buyer you will make no more concessions and if the buyer walks, so be it. It sounds like you can get more money by relisting it so I wouldn't have much patience with any more retrades from this buyer.

Olivia Grabka · Answer

@Kimberly Beltran. I would let the Buyer know that you are not making the repairs, get a final contract drafted with all the terms you want and give them 24 hours to sign.  If they fail to sign, list the property for sale.  Real estate is a black & white business as long as you get everything in writing.

Jonathan R McLaughlin · Answer

Do you mean an actual bank appraisal or a brokers estimate of the houses or either entities estimate of value after repair?

I find it hard to believe that a house listed at 100K less than its actual current value has this picky a buyer. Or that there are not 12 more lined up for it. 100K margins going in are not that common.

Chris Seveney · Answer

@Kimberly Beltran

If you are selling it for $320 and it’s worth $400 I will buy it cash

Theresa Harris · Answer

Tell them no and be firm.  Explain it was appraised at just over $406K and you factored in the condition of the roof and deck which is more than covered by the reduced price.  Give them a firm deadline and if they don't accept the signed offer, then put it back on the market.   I would see if you can get a HELOC or line of credit to replace the roof and the deck and put it on the market closer to the appraised value.  Some people are never happy and always want more and live to try and get the lowest price possible.

Wale Lawal · Answer

@Kimberly Beltran

Fix the deck and roof, and relist the property to find better buyers.

Get in touch with a local agent or investor and shorten your learning curve and save you a lot of headaches as they tend to understand the market better.All the best!

Buyer is driving me nuts. Should I end contract?

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