seller unwilling to provide C.O.C. and Zoning

[Andrew Cardillo]

Hey everyone, I'm new to Bigger Pockets and new to investing. I work as a sales engineer but have been spending the last year researching the real estate game and the B.P. community seems to be very nice and helpful so I'm glad to be here! I found myself to be in a bit of a predicament with a property I'd like to purchase and was wondering if you guys could offer some advice.

I found a house (student housing in upstate NY) and the home seems to be in good shape so I made an offer which they accepted. However, the seller does not want to produce a Certificate of Compliance or zoning. There is no fire escape from the third floor which to this point I believe has been grandfathered in but if a state inspector is welcomed in the house he will most likely require one be put in. The seller is also afraid that a state inspector will raise the taxes. I understand his fear of me walking after he has the inspection done and he is left with all these bills but I also do not want to get screwed on my first deal. Another fear of mine is that he knows there are too many non related people living in the house at one time and the decrease the number of occupants after I have made the deal will drop my ROI and it will have been a poor deal.

Has anyone had a seller unwilling to provide these documents before? Part of me wants to try to move forward and just not get the state involved because lets be honest, when have they helped? Is that too risky? 

Thanks!!

[Stephanie Jacobson]

Hi Andrew! Are you working with an agent? The Binghamton purchase contract has an optional requirement for C of O, code inspections and zoning compliance. I always warn my buyers of the risks, but overall, I don't often recommend those certificates are required for sale. The reason is that as soon as you get code enforcement involved, it's less about the additional bedroom and more about GFCI outlets and railings and stair heights. If a buyer of mine is in the situation where the numbers are heavily reliant on that extra bedroom, I will write it as a contingency into the contract that the legal use of that bedroom is confirmed during the due diligence period so that, in the worst case, if it's unusable, we are able to offer a different amount or back out if the seller won't play ball.

Feel free to message me if there's any way I can help!