3 Days to Closing - Seller backs out of repairs

[Jasmin Mcduffie]

BP, We are three business days away from our closing date and the seller (4:00pm on a Friday) calls my agent and asks for us to provide a price in lieu of making repairs as originally promised. As an investment property my lender says I can only receive a max of 2% of the sales price for seller concessions so including the repairs in that doesn't help since my closing costs are higher than 2%. My agents says I have two options: 1.Ask for sales price reduction 2. Get a GC to provide a price and have seller make a check out to them that's held in escrow (prepaid). If I had more time option 2 would be preferred since a small reduction in sales price wouldn't change my out of pocket expenses enough to cover the repairs. The repairs that are absolutely necessary (in my mind are): Fix / sister roof rafter that is completely split Replace basement seller door wood enclosure that has rotted and shows termite damage (no new termite activity) Fix electrical GFCI outlets near sinks. Gas flue isn't sloped correctly for combustion air to exhaust properly Remove debris from ductwork (brick/ mirror chucks, etc. seen when vents were removed) which prevented air from circulating. I plan on calling to get estimates today. While none of these are big ticket items there may be a premium to get so little work done by a number a trades if a GC has to do it as part of prepaid escrow. Their O&P alone could pay for the duct cleaning. If I had to guess this work is between 5K-7K not including GC Mark ups / O&P. I'm an architect used to working with commercial contractors maybe residential GC don't have significant markups... What would you do? Any creative ways used to get these paid for upfront without using seller credits? Thank you Jasmin

[Christopher Phillips]

@Jasmin Mcduffie

If this is an investment property, you should have negotiated the price down in the beginning. Asking for the seller to fix things holds up the closing if the repairs aren't done on time. You also stand to get a bigger discount when there are condition issues versus just getting repairs done.

Price reduction isn't a seller concession. A seller's concession is just permission to add closing costs onto the final loan. If the seller is offering a price reduction instead of making the repairs, just take the reduction.

When buying investment properties, you have to have rehab funds available, even if the property is turnkey you still might need to make adjustments. Given the amount of repairs you're mentioning, it sounds like this place needs some work.