Wow. A lot has happened. Where to begin…
Well, the last I left you I was getting ready to put in an offer on the “hoarder house.” I got my pre-approval letter from the bank and we put in a low-ball offer at $40K less than asking. This was John’s idea. I thought the sellers would balk and wouldn’t take us seriously. To my surprise, they countered and we countered and eventually came to an agreement. The news came on my birthday.
We asked for a 10 day inspection period because I was going out of town for work for a few days that week and I needed to be there for the inspection. They agreed. I scrambled to get a lawyer lined up and we set up the inspection for the weekend.
The inspection happened on a beautiful Saturday morning. We also had a few tree removal services come by to give bids. The inspection pulled back lots of issues, most of which were expected. A few unexpected issues were highlighted, including potential asbestos, that gave me cause for concern. But, we adjusted our numbers and plugged along. I locked in my interest rate and the bank ordered the appraisal. We had a tight closing timeline of 35 days (apparently new rules were instituted a few days before that makes it nearly impossible to close in under 40 days). But, we were determined to make it work – we had work to do before the winter set in.
Today, a week after the contract was executed, my lawyer called me and told me that he just got a letter from the seller’s attorney stating that the seller was pulling out of the deal! John and I were not the only ones who were shocked. My banker and a few real estate friends were surprised. Sellers don’t usually pull out of a deal and some people were not even aware that it was possible. But, looking at the contract, it is stated plain as day that either party can pull out of the deal during the attorney review period as long as the decision is not based on price. That doesn’t mean that they have to tell you the reason…all they have to say is that the reason was not based on price. It is possible that the seller got a higher offer that also had different terms (i.e. closing date, tax prorate rate, cash offer) and the seller can back out of our contract to take the other contract and simply say that the decision is based on the terms and not the price.
So, now that the deal has fallen through I think it’s safe to divulge the specifics:
- 3 bedroom/1.5 bathroom with 2 car garage
- Listed at: $205K
- First offer: $165K
- Settled price: $175K
- Budget for rehab: $90K
- Estimated resale price: $340K
I was disappointed, but I wonder if we may have dodged a bullet. I truly believe that most things happen for a reason, so I’m just going to put this in the “it’s not meant to be” file.