Big Issue at Final Walk through

[Maneesh Joshi]

Hello All, 

I am in the process of buying a rental property in Philly and I live out of state. We were to close today so I had my agent do a final walk through yesterday.  When he got there he found that the bathroom on the second floor had been leaking and water accumulated in the first floor ceiling and finally broke through the dry wall spilling water onto the wood floors below.  From what we can see it is possible that its been leaking for weeks.  

Has anyone come across this before?  What did you do?  Did you back out or renegotiate?  The seller is going to make the repairs now but not sure what I want to do.

My gut is telling me I should back out.  Water damage is pretty serious and who knows how the work will be done.

If I do go ahead and have them fix the issue should I ask that I be given the invoices of the work that was done?  Should I have them do a mold analysis?   I would want them to replace the wood floors and also check to make sure that the recessed lighting wasn't compromised.  

Is there anything I am missing?

Appreciate any insight.

Thanks!

[John Knisely]

First step is don't close of course...yet. Is the property going to be rehabbed anyway, or was it relatively turnkey?

Make sure the water is and the situation isn't getting worse. Someone should get in there asap to limit the damage (mop, dehumidifier etc). The Seller should do this.

If the deal works, I wouldn't back out until at least attempting to get the seller to come down on price or provide a credit. Renegotiate. It is the sellers responsibility to maintain the property through settlement date in proper repair (in most cases). I would get repair estimates from no less than 3 licensed, insured, reputable contractors to take the issue back to the condition it started in. You could let the seller choose 1 of the contractors quoting and choose 2 of your own or your agents recommendations. You could then take the average of the 3 and reduce the purchase price or have the seller provide a credit/assist and then agree to accept it in as-is condition with the damage.