Lawyers are often accused of being “deal killers.” While that may be true for a few, for real estate lawyers, it is manifestly untrue. I, for one, spend a lot of time trying to save deals that are falling apart, and I am good at it. The joke among my staff has become that I use a little “Tom’s Ointment,” and routinely fix the problem and go on to close.
Many Realtors® come to me to save deals they find themselves unable to save. Although I
occasionally see clients that have already decided to cancel a deal, I can’t remember a situation where I made an affirmative effort to talk either a Buyer or a Seller out of a sale,
until very recently.
Last week I met with a couple under contract to buy a house. Although there was a standard 15day inspection window, there was a “special” term that the Buyers’ $15,000 deposit would be forfeited if they backed out of the contract for any reason! It was subject to a 24-hour attorney review provision, but it was still an amazingly one-sided term.
The Sellers had been under contract before, but those Buyers had an inspection done, and it showed a lot of problems. The Buyers cancelled, and got their deposit back. The Sellers were very frustrated.
The “special term” was added to the new Buyers’ deal. That was the only way the Sellers were willing to sell now. “Once stung, twice shy!” The Sellers shared the inspection report with the new Buyers, and reduced the price (again). But the inspection was still very bad.
The flat roof on the house had at least one active leak, and there were a lot of “bubbles” in the roofing. There would have to be a new roof soon. There was a lot of water intrusion, and all kinds of rot and wear of the eaves.
None of the wiring appeared to have grounding, there were plumbing problems, and many other issues, including FEMA issues. The Buyers, however, had looked and looked for a home, and had very few choices left. They really wanted this home!
I asked the Buyers a lot of questions. They expected to spend “some” money on remodeling, and to move in, in the short term. Neither of the Buyers had any construction skills, or “uncles in the business.”
Looking at the sales history, it appeared to me that the Sellers were losing money over what they themselves had paid for the property. Unless the Buyers put $100,000 or more into the home, they would likely also end up selling for less than they paid.
It wasn’t easy, but I convinced the Buyers that they were buying someone else’s problem. The cost of remodeling would almost certainly greatly exceed what they expected. And I pointed out that “remodeling a home was often the last official act of a marriage, before divorce.”
They thought I was kidding, and they laughed, but I was actually serious. Eventually I convinced them that they needed to run away from that purchase, and we went ahead and terminated the contract. And their marriage is fine, thank you!
Article by Tom Brodersen, Esq.