By Living Room Realty, October 18, 2018
I got a call from Zoe on a beautiful July afternoon and our very first conversation started by her saying “I’ve got an easy one for you”.
She had visited an open house with her husband over with weekend and they wanted to write an offer on it. The offer was promptly written and accepted after a little bit of wrangling over price and details. The inspections went pretty well…but…upon further examination of the property…it needed a lot more updating than anticipated and they decided to pull the plug on the transaction.
A few days later, there was another property that came on the radar that was a pretty good fit. For this one, the sellers were teetering between selling or renting. It had been on the market for a while and they were about to cancel the listing since they didn’t get their price. After some arm twisting, our offer was accepted; on to inspections again. In digging into the research, we uncovered a really big permitting issue. Yikes!
The sellers had done a down-to-the-studs remodel in 1998; they pulled permits, did architectural drawing and had multiple inspections. But the city didn’t have records of the inspections and the seller’s files were literally in the middle of the Atlantic Ocean (they were moving to Holland). The permit was never finalized and closed out; this is a huge liability that would become the property of the buyers if they chose to close the sale. They were not willing to proceed without a resolution (rightfully so!).
We extended the inspection period multiple times and the seller took the initiative to coordinate with the city to close out the permitting. Miraculously, the city found the inspection records, performed a final inspection and closed out the permit. All parties involved were shocked that the city signed off on it without making the owners go back to the drawing board and bringing everything up to modern code (which is significantly different that 1998).
After all of that, the appraisal came in $50,000 below the agreed upon sale price and buyer and seller were not able to come to terms to keep the transaction together. The property was really unique in that it was a large 2 bedroom home with a detached ADU. As a package, it was 4 bedrooms, 3.5 bathrooms and about 3,000, but the appraiser viewed it differently and not able to justify the sale price.
The earnest money was refunded to the buyers and the search goes on…
