FINALLY closed on the multi unit I referred to in my previous post. Just wanted to revisit some of the things we were able to negotiate even after the property was being sold "as is". Again, it seems CA is different than some other states in regards to the technicality of this wording so if this doesn't exactly jive with the way it's handled in your state, just keep that in mind.
A little recap: Sellers wouldn't let us view the inside of the 4 units until there was an accepted offer. Listing was being sold as is. We knew until we saw the inside of the units it would be difficult to make an informed decision as to what we thought the property was worth. To that end, we figured that there would have to be some negotiations after our home inspection and visual inspection if anything substantial came up.
So we knew that the units needed a new roof and that was factored into our offer. What we didn't know is that the existing roofing material was an abestos based clay type shingle (sellers didn't either). We had the material tested and it came back positive with up to 30% asbestos. Because of this most roofing companies will not touch that project...or at least the removal. We had to get bids from abatement companies for the removal and they were substantial. Again, remember this is CA and it seems everything is super expensive. Our bids, just for the removal, were anywhere between $22K and $36K with most abatement companies asking for the units to be vacant for a week while they do the work. So not only would we have a $22K expense added to the new roof, we'd have to place the tenants somewhere else for a week.
The reason I bring this up is because if we would of just bought the units "As is" and had no negotiating power after our offer was accepted then we would be out a ton more money than was expected. That or we lose our earnest money if we walked. Our initial accepted offer was $291k, we ended up paying $245k. We negotiated down the cost of the abatement company removing the roof, placing tenants, and because we figured the sellers wouldn't want to have to disclose the fact the roof contains asbestos if we were to walk, we asked for much more and got it. So for those of you guys out there asking if it's ok to renegotiate after making an offer on a listing being sold "as is", I would say absolutely. Every state seems to be different and each purchase has it's own nuance, but I'd for sure do it.
One other thing I really had driven home on this purchase is it's ok to ask for the moon. I've always been a little hesitant to ask for too much because I didn't want to blow a deal and upset the sellers. If you catch someone on the right day you never know how much they're willing to negotiate, but you have to ask.
