Posted by BR on November 13, 1998 at 05:16:12:
Thanks John…you’re wonderful!!
Repairing Before Closing - Posted by BR
Posted by BR on November 12, 1998 at 12:43:27:
Just purchased property with a closing date of 11/30. The roof is in need of repair and in Michigan it can snow at any time.
I’d like to prevent further damage if possible and get the roof repaired now. Has anyone ever made repairs prior to closing without problems? Any advice would be appreciated.
Re: Repairing Before Closing - Posted by John Behle
Posted by John Behle on November 12, 1998 at 13:45:34:
We’ve done extensive repairs before closing. One was over $15k cash and several hundred man hours of work. I really don’t like to because of the risks and it can at times be hard to negotiate, but sometimes you have to.
In some cases, we have just had to take the risk. At others, we coordinate with them and add the repairs in as additional earnest money. The risk is in not closing, but I don’t worry about that because by the time we get to that stage, there is almost zero percent chance of not closing.
In your case, it sounds like something that should be done. You’ll need permission from the seller - which can be done through an addendum to the offer. Have the money (and labor if you do any yourself) apply as additional earnest money or deposit to reduce the downpayment. Check with your state laws. Sometimes the only refundable part of the earnest money is the initial amount. Additional deposits may possibly not qualify as earnest money and be refundable unless you specifically state that. Insert some language that if the seller fails to close for some reason, that they will re-imburse you for all expenses, labor and any additional damages you want to include.
To avoid the seller not being able to pay you or any dispute that way, you can create and record a note against the property. Then worst case scenario is that you could foreclose if they were un-able or un-willing to pay. Your work would consitute a “mechanics” or “workmen’s” lien anyway, but the mortgage is a little more firm.
Have an attorney THAT KNOWS REAL ESTATE draw this up. Your best bet is probably an attorney with a title company.