Seller wants more money after deal already signed

[Joseph Belgrad]

I'm under contract to purchase an assessed 3 unit property. The city has declared the third, basement unit illegal and has given the seller notice. One of the other tenants also put an illegal pool in the back yard without required permits or fencing. I knew these going into the sale. The seller lives quite distant and is unable to manage these issues. As such, we agreed on a low price of 210k in exchange for me waiving all contingencies and forgoing smoke certificates. The only requirement was that the tenant in the basement unit would be gone at closing due to the unit being uninhabitable. I'll have to put a lot of work and money (50-60k) to bring the unit up to code, but it should be worth in the low 300s once done.

Well, the tenant in the basement unit refused to leave. As such, the sellers asked for extensions for closing. First it was 30 days, then it was 45 days. Before approving the 45 day extension, I asked for documented proof that the tenant would really be leaving. They said the tenant purchased a mobile home and were going to provide a copy of the deed as proof. The tenant refused to give them a copy. Then they offered a 5k closing stipulation that if the tenant were still occupying the illegal unit by closing that they would allow me to keep 5k from the price to go towards eviction costs (when the moratorium is up). I said that I wasn't going to deal with evicting a tenant and instead suggested they offer the 5k to the tenant. 

Then after a couple weeks I suggested that while I wouldn't do a 5k holdback, I could see doing a 15k (thinking we might negotiate to 10k) holdback. The sellers then said that the tenant said they were going to need two more months but would be willing to leave immediately for 5k.

"Great!" I thought, "Now the seller can just give the tenant the 5k they offered me, and then we're all set." Nope. The sellers are now saying that they want me to cover 2k, they cover 2k, and the realtors to cover 1k. They also said if I don't agree to that then they are walking. 

I don't want to cut into the realtors' commissions. Also, the sellers had ONE JOB - make sure the tenant was out. I don't really feel comfortable paying for the one job they had to do after waiving everything else already. Why not just give the tenant the 5k if they were prepared to give it to me anyway? At this point, I'm considering walking as well. It's just such a good deal, I would hate to lose it because of my ego over 2.5k (assuming I can get them to split it 50/50 with me rather than cutting commission). 

What do you all think?