All Forum Posts by: Gaurav S.

The property is in Santa Barbara. Everything is expensive here. I don't think the seller is getting a commission from the pest company to do the work. More likely he is being ripped off for it. I feel bad for him but I don't want to get ripped off myself by paying for it.

I am not saying I won't pay anything. But when I agreed to buying the property "as is" I wasn't aware of the 6000$ in expenses for the heater and asbestos containing duct. Since the seller is not willing to renegotiate the price on that I don't feel as bad if I don't pay him for the pest work. The other option is to walk away, which is something I am also seriously considering.

My wife`s point of view on this is that we get well maintained but old and non-upgraded homes for 620k in that area. So why not buy a not so well maintained home for 560k and renovate it and enjoy the newer upgraded home.

I feel from a buy and hold point of view it will be much better to pay more for an already upgraded home as all the upgrade costs are being paid for by the 30 year loan which comes with tax deduction and you pay it off with de-valuated dollar over time.

Buying cheap and renovating now requires a lot of upfront investment which will be financed by expensive dollars today. These dollars could get better rate of return somewhere else(like stocks).

So that's what is really confusing.

Thanks a lot guys. This community is awesome !!

I talked to an attorney and he advised me to write a scary looking email/letter to the seller telling him that we are going to perform as per the contract and we are not going to pay anything for the pest work. Nowhere in the communication with the selling agent we have mentioned that we will pay the seller or we will do pest work on the property.

He has not responded back yet. I will keep you guys updated.

I am also going to get a quote from the Duct work company and the heater company to replace these items. I will send the seller a Request to Repair form with the option to pay for these items during closing or reducing the offer price. Most likely he won't agree but it would be nice to bring that on the record so that he knows that the next buyer will see the inspection report.

Oh.... I didn't know that. Well they already have a backup offer higher than mine so probably they won't negotiate anyways.

I guess I am counting on the pest issue to get resolved in my favor.

Tevis : I agree with you. I also agree with others that I should settle this by offering him something even though I don't owe anything as per the contract.

Problem is during the inspection I found that the heater is 50 year old and the heating duct with asbestos is bent and needs to be replaced. That cost in itself is $6000 I wasn't anticipating. Since I bought the home "As-is" I don't have negotiating power here.

So to buy or not to buy is sort of hanging on the outcome of this pest issue.

I tried getting a second quote but the new pest guy said he can't go on the property until the first pest guy has given a completion certificate. He said if he goes there and issues a report the other guy can sue him saying that he was already working on it and the work wasn't done yet so how can he evaluate.

No the contract has no mention of pest. The seller assumes that pest is required but that is usually a lender requirement. I don't know if my lender would make an issue out of it or not.

Hi Brian,

I have thought about the option of proposing to increase the purchase price to offeset the pest cost. Problem is that I am paying 24% down to get a loan amount less than 417k which lets me use conventional interest rates instead of super conforming rates(+0.3% to 0.5% higher). Purchase price is 560k. Now if I increase the purchase price either I will also have to live with the higher rate plus I will loose the interest rate lock. Interest rates have moved higher since my lock.

So increasing the purchase price would only require me to pay more downpayment if I wish to keep the interest rate the same.

My realtor is suggesting going through negotiation overseen by attorneys from California Association of Realtors present. If that doesn't work we will have to either back out or sue the seller for not closing.

I am a first time homebuyer in California who has been looking for a home for a year and a half. Never been in escrow before as I was always priced out. But finally got my offer accepted but ran into this issue.

Seller had done the pest inspection through a company which quoted him $8500 for pest work. Report was on MLS. We read this inspection report and knew that if we buy the home we won't be going with this pest company as their quote was very expensive.We bid on the home and our offer was highest. Seller countered saying that the house will be sold "As is" and he verbally told us that he will not do pest work. We said ok and we signed the contract.

Now I am in the 17 day contingency period. We did home inspection and found lots of small issues....nothing really big. Sellers agent emails us saying that the company that gave pest quote was scheduled to do the work next week and asked us if we want to go ahead with the pest work through that company. We told him no and that we want our own pest inspector to give us a new quote as we are paying for it anyways. Two days later the sellers agent replies that the pest work is already done. The company went ahead and did the work without his knowledge. The seller knew about it but the agent didn't.

Now the agent says we have to pay fully to the pest company as we said in the contract that seller won't pay for the pest. But the contract says the home is being sold as is plus we have email proof that we were trying to get better quotes while the original company was doing the work without our knowledge.

The seller already has a higher offer on the house which he received after he accepted our offer. So I am sure he will try to back out if we don't pay the pest guy.

Can he back out of this sale ? What if he is unwilling to close the escrow until I pay the pest company ? What are my options ?

If you know a lawyer who can advise me on this issue please let me know.

Thanks Scott. Which of these expenses are more like DIY projects.

I guess painting inside the house and minor plumbing and window fixes could be done by me. What else ?

The total sum of above estimates is $52800. The house would be fairly valued after doing these expenses but we plan to live in the home for long term so goal is not to make money in the flip but to make sure we are not forced to spend more than the ARV of the home.