What should be my next steps?

Question

The seller has accepted my cash offer. What should be my next step? Just inspection and find an attorney will do the rest?

Thanks

Chi

Ivan Lai · Answer

Hi Chi, the legal address vs. physical unit discrepancy is a big red flag.  If you're going to have an attorney do a title search, s/he should be able to clarify what is on title in court records.  That just doesn't sound right.

Also, looks like the property you're buying is a condo, is that right?  If so, make sure to do your due diligence on the condo community.  Talk to the neighbors, find out what they like and not like about this condo community.  If they're renting, what's the going rent?  Are there any annoying tenants in the building?  Loud tenants?  Ask the seller to provide the CC&R so you know what's allowed and not allowed.  Ask the seller for a copy of the past two years condo HOA financial statement and look through it.  How much is the monthly fee?   What do they pay for?  Any utilities?  How many assigned and open parking spots?  Is the reserve going up or down?  If they don't have much in their balance, they may have to raise the monthly fee soon which would eat into your monthly cash flow.

I've never invested in a condo, so some of the things I don't know that you may want to look into:  If your upstairs neighbor has a leak that leaks into your unit, who's responsible for the repair?

Get all this info and straighten out the title issue so you can use all this info, along with the inspection results, to renegotiate with the seller and re-assess the deal, make sure you're getting the proper return and cash flow you're looking for.  Then just jump in and go for it!

Ivan Lai · Answer

Hey Chi!!  Great to see you on here!  Congratulations on this deal!  What are you trying to do?  Flip this house?  Not sure about Connecticut but in most states you don't need an attorney if you're making the offer through your agent, the standard purchase agreement template should suffice as long as you and your agent filled it out properly.  Now that the cash offer is accepted, you want to get the inspection scheduled ASAP, leave yourself plenty of time before the contingency period expires.

You have a great advantage now that the seller is in contract with you.  Utilize the inspection for two things:  (1) Make sure you identify the major risks with the house so you know how much you need to spend on the repairs and decide if the deal still makes sense, and (2) use the inspection findings to negotiate the price down, either in the form of lowered price or repair allowance, or just have them address issues before closing.  If you're flipping, you wouldn't want them to address the issues, just have them give you credit for major issues.

Give me a call if you want to chat live, I'm no expert but am happy to help.

Quynh-Chi Nguyen · Answer

Thanks @Venkata Maganti - if I cannot rent it out right away, I will live in it until the summer. I do notice it's hard to rent in Connecticut during winter time.

Venkata Maganti · Answer

Hi @Quynh-Chi Nguyen , It all depends on your strategy whether it is to live, hold for income, flip etc. All the best. Do not forget, BP members are there to help you.

Venkata Maganti · Answer

It is not really true that you can not rent it during winter. People will have their own reasons to relocate. List it for rent, If your plan to use the property for rental business. Get used to it. As @Ivan Lai suggested first look at the red flag.

Quynh-Chi Nguyen · Answer

Thanks @Ivan Lai & @Mark Avery for input. I am now in the process getting quote for inspection and attorney.

One strange thing though ... The legal address from the town is 1690 Dixwell Ave B8. However, the physical unit is B7. I am quite confused and told my realtor to ask the seller to correct it .. He said it's not his place to fix it .. because the person who physically lives on B8 is recorded as B7.

Mark Avery · Answer

Hi @Quynh-Chi Nguyen, Congrats on an accepted offer.  Yes, next steps should be inspections (building, well, septic, radon... etc).  And then any re-negotiations (if needed) once you have the results of all the inspections.  Start looking for an attorney while going through the inspections b/c in CT you'll need them write up the contract and very important they'll do your title search.  Once everything is settled and both parties have signed the contracts, get you cash ready for the closing.  Congrats again, Mark

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