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It is common out here for certain things. I've had a contractor bill escrow for an oil tank cleanup which was $14,000. That was the large repair billed to close of escrow.
Interesting. So let me see if I have this straight: The contractor agrees to bill to escrow. The contractor's payment is added onto the sales price. When the sale goes through, the contractor is automatically given their share.
So what if the sale doesn't go through? Does the contractor have to wait until it's ultimately sold to get paid? Or would they come after me to get paid?
It really comes down to what the bank will agree to. for something his large, I'd hesitate to get it fixed on my dime before closing. Do you have a lawyer in this transaction who can advise you?
the danger of not closing is the real issue, b/c then you do have a claim against someone, who you never know if you're ever goign to get paid from.
in the past, I've seen freinds close on houses with some open issues that money is held in escrow for, things that the bank required. However, that doesn't mean banks will do this for something like a foundation repair.
If the bank won't do this, even if the foundation repair is "factored in" to your offer, the house is worth significantly less. mainly b/c essentially the house is unmortgagable. the owners will need to sell to someone with the cash to buy the place.
I guess my feeling is, if you can't work out something where the item is fixed after closing with money held in escrow etc, I'd walk. Don't pay 14K and find out that the owners decided to stay.
Thanks Chris, you've pretty much confirmed my feelings on this now.
I did just speak with a foundation repair company, one which is highly rated and had given me an estimate. They do offer a "payment on closing" option wherein nobody puts any money down and they get paid in full upon closing. Their expense is, presumably, added on to the sales price. If the deal somehow falls through, then they put a lien on the house for the amount of the repair.
This almost sounds too good to be true. I get the foundation fixed with no added risk to myself and the seller doesn't need to come up with money they don't have to begin the repairs. Does this sound right or am I missing something here?
What kind of crack(s) is this that requires 12K in repair? For 12K, a structural engineer inspection should be included. Normal crack repair shouldn't be costing that much, I would say $300-500 per crack. The repair method is epoxy injection. If the house is on a slope land, you need a structural engineer and a geotechnical (soil) engineer to test the stability of the soil.
I've just recently walked away from the deal because of the crack foundation that sits on a slope lot. I'm glad that I did. I found a better house and better deal two weeks later.
What kind of crack(s) is this that requires 12K in repair? For 12K, a structural engineer inspection should be included. Normal crack repair shouldn't be costing that much, I would say $300-500 per crack. The repair method is epoxy injection. If the house is on a slope land, you need a structural engineer and a geotechnical (soil) engineer to test the stability of the soil.
I've just recently worked away from the deal because of the crack foundation that sits on a slope lot. I'm glad that I did. I found a better house and better deal two weeks later.
...Their expense is, presumably, added on to the sales price. ...
You and the seller could do that if it will still appraise at the higher price. Otherwise, it comes out of whatever sales price you agree to that still meets the loan appraisal. If it's not enough, you or the seller would have to kick in more money.
All repairs should be done by seller only. I never heard of such a thing as the buyer must do them before owning the house. Smells like a scam to me. If they seller is not willing to fix it, walk away. Simple as that.
All repairs should be done by seller only. I never heard of such a thing as the buyer must do them before owning the house. Smells like a scam to me. If they seller is not willing to fix it, walk away. Simple as that.
I'm thinking it's "simple as that" to you perhaps because you didn't actually read the thread. I'm sorry that sounds harsh...
I'll recap it for you. The seller does not have the cash on hand to do the repairs. They will have the cash after the sale, but they do not have it now. The price which I've negotiated for the property takes into account all the repairs it will need once purchased. I have several estimates for all of the repairs, all of those estimates have been considered and factored into my offer. I am not overpaying for the property. All would have proceeded smoothly if the bank's assessor had not come back and insisted one of the repairs, the foundation, needed to be completed before the loan could be approved.
You and the seller could do that if it will still appraise at the higher price. Otherwise, it comes out of whatever sales price you agree to that still meets the loan appraisal. If it's not enough, you or the seller would have to kick in more money.
Thanks. We do believe it will still appraise at the higher price. Based on recent comps in the area, we should even have a fairly wide safety margin. We should find out soon.
Thanks. We do believe it will still appraise at the higher price. Based on recent comps in the area, we should even have a fairly wide safety margin. We should find out soon.
not to throw in more input... but I can't help myself sometimes...
your foundation repair company seems like a good answer, but not for you, for the sellers.
if I were in your shoes I would do everything possible to not have my name on any paperwork with the foundation company. even if they lein the property, they may have recourse against you if you engaged them. Its their house, have them fix it.
assuming the agreement is that this was factored in, your position I would think should be, I'll adjust the contract to a higher price to effect the cost of the foundation repair contingent on sellers making the foundation repair.
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