Seller All of a Sudden Cannot Afford Pending Assessments

[Erik D.]

I have been working on buying a condemned duplex for quite some time now.

I've gotten bids from general contractors, a structural engineer's report, etc

Everything is set for closing, the lender is ready, I am ready, all the paperwork is complete.

Then, today, I got a call from my real estate agent saying that the seller did not know about a $7,000 pending assessment (vacant building fee) and won't be able to pay, meaning this duplex will not close. I knew about this assessment at the very beginning of the deal and made sure it was included as part of closing that the seller would pay for all assessments and the pending assessment.

This duplex has been vacant since 2013. The seller has accumulated at least $30,000 in assessments and tax delinquencies. They will need to bring cash to closing on this deal, they are underwater. They even have a mortgage on the property still.

Why all of a sudden is a $7,000 pending assessment holding up the show? Are they just trying to get more money out of me? The seller is comprised of 4 people (two couples). I looked up their homes and one couple has a $350k home and the other somewhere around $150k.

Are they bluffing? There's no way I am willing to pay for a $7,000 pending assessment, it has been agreed that the seller will pay all assessments and pending assessments. That was the deal.

I do want to close on this deal, what can I do? I already asked the city if they can waive the pending assessment and they cannot.

Frustrating! Five days to closing!

[Chris Mason]

Originally posted by @Erik D.:

This duplex has been vacant since 2013. The seller has accumulated at least $30,000 in assessments and tax delinquencies. They will need to bring cash to closing on this deal, they are underwater. They even have a mortgage on the property still.

Why all of a sudden is a $7,000 pending assessment holding up the show? Are they just trying to get more money out of me? The seller is comprised of 4 people (two couples). I looked up their homes and one couple has a $350k home and the other somewhere around $150k.

Are they bluffing? There's no way I am willing to pay for a $7,000 pending assessment, it has been agreed that the seller will pay all assessments and pending assessments. That was the deal.

I do want to close on this deal, what can I do? I already asked the city if they can waive the pending assessment and they cannot.

Frustrating! Five days to closing!

 This sucks and is frustrating, and just FYI my "theme of the month" for July 2017 is in fact (much to my dismay) "sellers that are not qualified to even sell their home," so I've got your frustration spread across multiple transactions, with multiply buyers losing their minds. And to make it even more crazy, this is the Bay Area where everything has been appreciating a zillion percent per year, so I'm baffled by how it's even possible to get yourself in this position. Moving on....

With this caliber of homeseller, this honestly isn't unusual. Someone that plans ahead and that can do math wouldn't be in the position they are in now, so we kind of must assume they can't plan, they aren't responsible, they don't maintain the property and haven't for a decade, they can't do math, etc, and they will have issues with being qualified to sell their own property that invariably will come up at the last possible second (birds of a feather flock together, so it's not like they typically pick an agent that will check either...), after you've busted your butt and rushed to be ready to close on time. Does that sound about right? 

The good news is that this caliber of person lets REI get great deals. The seller might be bluffing, but if it's from the escrow company (or whoever does settlement services in your state) than I doubt it. Realistically the plan of "get the settlement service provider to risk their entire business so I can bank $7k extra!" isn't really a viable game plan. But, again, the good news is that this seller being an irresponsible individual is letting you presumably get a great deal on the upfront sticker price. The question is if there is enough meat on the bone for you to miss out on $7k and still be fulfilled at the end of the meal. I'd suggest trying to answer that question without emotion.