Posted by rise2it (VA) on October 08, 2006 at 23:37:32:
Sorry about the deal, but congrats on saving yourself a ton of future headaches!!!
Due Diligence Saves the Day (Long) - Posted by Ruben (KCKS)
Posted by Ruben (KCKS) on October 07, 2006 at 14:48:08:
I posted on here about a double wide land home package repo that I was trying to buy. Appraised value $95,000, tax accessed value $72,000, original listing was $79,000, I got an accepted offer at $42,500. Since the rental rates in the area are $600 (low) to $700 (high) I thought it was a good deal. Home could be rented with almost no rehab.
While doing my due diligence I discovered that the sewer for the sub division does not work correctly. Raw sewage seeps into the street and surrounding area from time to time. There is no fix in sight and the city refuses to anex the area due to the poor condition of the 60 homes on the Lagoon single stage sewer system.
Needless to say I canceled the transaction.
I did advise the agent that I would keep a standing $12,500 offer for both the land and home. If it was accepted I would move the home to another location and leave the land vacant until the issue was resolved (it is the growth path of an expanding city).
A couple of lessons from this I got:
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Make sure to put a long enough inspection period. The bank wanted 7 days. I insisted on at least 15.
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Talk to the neighbors. They were the ones who turned me onto the issue.
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Do not be afraid to walk away from the deal. This was my first land home deal. It was hard to walk away from instant equity.
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A dead deal is never dead. I am sure the bank will eventually sell for a very low price. So I still may get the home.
I hope my story helps someone else out there.
Ruben D. Flores
Re: Due Diligence Saves the Day (Long) - Posted by Craig (AL)
Posted by Craig (AL) on October 08, 2006 at 06:03:55:
Excellent post Ruben. Real shame about the sewer system. If not for that it appears you would have had a real nice deal.
Craig