Changing Offer After Contract Termination?

Question

Hi everyone:

I'm in a situation and looking for a little advice. I made an offer on a property sight unseen and the seller accepted.  Problem is they took an extremely long time to produce the signed contract, and when they did, it was missing things (addendums, initials, etc.).  I couldn't forward it to my attorney to start the title search because the docs were incomplete. I told the Seller i wouldn't hand over the EMD without a complete contract.

The listing agent's broker suggested we terminate the contract and start again.  I reluctantly agreed, so three weeks later we're back to square one.  I've signed the termination agreement and the first deal is officially dead.  Now the hard part.  I didn't have the benefit of an inspection before I made the first offer, but was still fully committed because it's what we agreed upon.  Since I now have the inspection report, which revealed additional problems not disclosed by the seller, I'm considering revising my second offer.

Would revising my offer be in poor taste?  Completely acceptable?  I don't want to turn off the buyer or the other agent.  I'm thinking of reducing my offer by $1K (I found out the windows are painted shut and will have to be replaced).

Your insight is appreciated.

Ursula

Wayne Brooks · Answer

Ursula B.

This raises a different question.  If the HOA bought it back at an HOA foreclosure for $6k, that means no one else was willing to bid over $6k.  Why?..there likely is a mortgage on it.  Have you verified title?  Does your contract call for free and clear title, or is it some type of Quit Claim offer?

Simon Campbell · Answer

Good for you! I think it may have been a smart move to keep looking. It is always better to be patient and wait for the good deal than to rush in an regret it later. I hope everything works out for you.

Ursula B. · Answer

@Simon Campbell Thanks! I ended up backing out of this deal.  The seller was just very slow to do anything, and I took it as a sign to move on.  Glad I did, the deal I'm working on now is 10x better than that one!

(Sorry for the delayed response - I'm not getting thread notifications anymore.  Need to check into that...)

Simon Campbell · Answer

Oh my, definitely need due diligence here. HOA repo's often do not clear title and you could be stuck with a heavy mortgage blight. Also, before paying for the windows, make sure that you are the one responsible for the replacement. Some HOA take responsibility for window replacement. It would be in the condominium by-laws.

Ursula B. · Answer

@Wayne Brooks  Haven't verified title yet, as they were not able to produce a completed contract that I could forward to my attorney until now.  Contract calls for free and clear, general warranty deed.  My attorney doesn't fool around when it comes to titles, so if they cannot produce one free and clear with a general warranty deed she will not close it. I know some folks advocate for doing their own title searches, but I prefer to let the attorney handle it.

The $6K foreclosure is just what I can gather from Realist.  I'm sure there's so much more to the story.

Ursula B. · Answer

Thanks for the replies everyone.  Sorry I'm late in responding, but I haven't been getting notification emails like I used to. The seller accepted the lower priced second offer.

@Brian Stephens I called them motivated because it's owned by the HOA.   They need cash on the books.  From what I can tell they took over this unit for $6K in fees, so a $21K deal is money in the bank for them. It also needs about $7K to make it rent ready, and I don't think they want to dish it out.

@Simon Campbell @Darrell Shepherd The windows are in pretty bad shape - appear to be original to the unit.  Being painted shut was just a bonus.  They gotta go.  It's a first floor condo unit, so there's only three windows that need to be replaced.  The local vinyl replacement window store charges $249 each, including installation.  I've bought 3 sets of windows from them in the past for various projects.  And I always make my offers subject to HOA pre-approval of the windows I select. I don't need any surprises after closing.  I also got them to repair a leak from the second floor unit AND fix the ceiling in the first floor unit.  So the reduced offer and the fixed ceiling saved me about $2K.

The inspection was done during the first offer, but I did allow another 2-week due diligence period in the second offer. Awaiting the bid from my contractor.  Took us so long to get here that I'm kinda over it.  I'll keep you posted.

Simon Campbell · Answer

I agree with @Brian Stephens here. I highly doubt that $1k will cover the replacement of all the windows in the house. I would suggest bringing a licensed contractor with you and get a hard estimate of the true costs and then run your profitability projections with the actual bid.

Brian Stephens · Answer

It sounds that you are ready for this property, cool, do you know WHY the seller is motivated?  An offer that includes "subject to inspections" is a good idea, as @Simon Campbell  suggests.  With the $1K adjustment on your offer, windows are expensive and the process of installing them can involve more material and labor than initially intended.   Best of luck with the deal, please keep us posted about the progress.

Ursula B. · Answer

@Wayne Brooks @Simon Campbell   Thanks for the replies. Just wanted to be sure I was looking at this from a business standpoint. I really don't want to lose the deal over $1K, but this seller is pretty motivated so I think they'll accept it at $1K less.  My next offer, however, will include an expiration date. Not wasting another 3 weeks with these folks!