Profile picture for user2048062

Problems with short sale home after the inspection but before closing!

We are buying a short sale.  There is currently a tenant living in the house who should be out when we close in 3 weeks.  The seller of the house is not a very nice woman and neither is her realtor, making this escrow process really frustrating, and it seems like the issues never end.
The house is 23 years old and the house inspection and septic inspection went really well.  Unfortunately AFTER the inspections the tenant is having some plumbing issues.  The problem is, the seller refuses to pay to fix the plumbing and the tenant is left without any shower or toilet.  I know this isn't our problem yet and should be resolved between the landlord and tenant.  But we will want to know the plumbing is taken care of before we close, and since the house is a short sale sold AS IS wont it be our responsibility to pay for it?  
So, who pays to fix it?  If it has to be us, can we get a credit from the seller?  If the seller refuses to fix it, and we aren't obligated to pay it, what is the tenant suppose to do about a bathroom (she cant afford it and is essentially being evicted)?  Could this issue hold up closing?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013 - San Diego
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (8)

Define "As-Is."  

The key bit of information that is missing is "As-Is from the date of _____."  That could be date of contract offer, date of home inspection or date of settlement.  In my market, most agents use date of home inspection.  

That means that if the plumbing was working on the date of the home inspection but there was a change in the performance after the inspection but before closing, then the seller has to repair/replace.  If the plumbing was defective the day of the home inspection, then the seller would not have to make the repair.

With that said, this is a short sale.  While you have a contract, the seller may not honor its terms if the bank does not allow a credit.  I assume the seller will not make the repair.

Do not worry about the tenant.  You have enough problems to deal with.  
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 24 2013
I would ask for a credit. The worst the seller/bank will say is no. Then you just have to decide if you are willing to carry the cost of fixing the plumbing issue yourself. 

Anything could hold up closing, but that is part of the risk of these short sales and REOs. Have you talked to your agent about this? 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
October 24 2013
I know my lease states the tenant is responsible for all plumbing issues.  So you will need to check the lease to see what the situation is there.  As victoria mentioned at the end of the day it will come down to two choices.

a. You can choose to buy the house
b. You can choose to not buy the house

It sounds like you really want the place and closing is a sure thing in 3 weeks right?  If that is the case and I were in your shoes I would simply go introduce myself to the tenant and bring a plumber. No one likes plumbing problems so I bet they just don't have the money or are afraid they don't have the money or maybe their brothers in laws told them their landlord was supposed to fix it.

In most cases tenants can order repairs from professionals, so once you know how much the repair costs have the tenant order the repair and you pay for it. Everyone is happy.

Sometimes solutions are found outside of the parties involved in the transaction environment.

 Communication solves everything, especially if you are the person in the transaction with the money. I bet the fix is less than $1000.  Of course you want to be sure you can close because you are out $1000 if you fail to close.

Just weigh the risk and reward and have your agent help. Just some creative ideas when the obvious path seems to have never ending problems.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
Your contract should cover this problem. In Florida the seller is obligated to keep the property in the same condition from date of execution to the date of closing. If you went under contract on a home with working plumbing and then it broke before closing the seller should be responsible for repairing the plumbing. On FL contracts this is called the "Maintenance Requirement."

But you're in a short sale situation and you're at the mercy of the bank. Do you have a Realtor representing you? Your agent should put your concerns in writing so that the listing agent/seller can start addressing the problem. Will the seller make the repair? Who knows. Will the bank pay for the repairs? Probably not. If the repair is cheap and you want to pay for it yourself right now I would make that offer. Yes, you could be out of that money if it doesn't close. That's why I said "if the repair is cheap..." Sorry you're in this situation.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
As-is doesn't mean you can't ask the seller to pay for a repair. But, like in any transaction, the seller doesn't have to pay for any repairs. And, with a short sale, the seller is supposed to have a financial hardship, so the seller will likely claim they have no money, and the lender may or may not allow a credit or have the repair money in the 'short sale budget. This is definitely something you should have been prepared for. So, now the ball is in your court. Either you cancel the purchase (hopefully you're still within your contingency period), or you deal with the plumbing later. You could always get a plumbing and/or camera inspection for clarification on what the problem is. If something major is found, and you're within your contingency period, you can decide what you want to do before it ends.

Short sales can be really frustrating!

Good luck to you.

Warm Regards,

Cory La Scala, REALTOR
Independence Realty
Lic # 01443391
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
Profile picture for wetdawgs
While the house is being sold "as is", I interpret "as is" as the condition it was at the time of purchase contract signing (and inspection).    If the condition has changed, I would request it be repaired before closing.   Please ask your agent.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
I would suggest finding out what it is going to cost to fix the plumbing issues.  Then go back to the bank for a price reduction as many Short Sale Sellers do not have the funds available to fix or repair items.  If you continue with the escrow and close on the home, you inherit the plumbing issues.  It does look like this will hold up closing until all parties come to an agreement.  I wish you the best of luck!  
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
Short sale lenders typically do not allow credit for repairs, although once in awhile they do. Agent for the seller is going to have to ask short sale lender. Has your realtor spoken with the seller's agent? Short sales are emotionally draining on all parties. The seller is losing their house. The lender is taking less than owed. None of them are particularly motivated. Plan A will be the seller will fix it or the lender will allow the cost of repairs. Plan B will be the lender won't allow the cost of repairs. The seller won't fix the problem. You will have to decide if you want to proceed forward or not. Not many choices in short sales.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
August 12 2013
 
Related Questions
Loan Pre-approval VS. Loan Approval
Profile picture for Ritu Singla
Latest answer by Ritu Singla
July 13 | 9 answers
How to find out if the property that I am going to buy has any taxes or bank mortgage on it
Profile picture for Ritu Singla
Latest answer by Ritu Singla
June 23 | 7 answers
SD - Looking for buyers agent (commission rebate)
Profile picture for Tiffanie888
Latest answer by Tiffanie888
June 09 | 13 answers
first time home buyers with 700 credit score, and little down payment
Profile picture for Andrew Byrd
Latest answer by Andrew Byrd
May 21 | 4 answers
I'm interested in investing in some vacation rental income property. How do I get started?
Profile picture for Kristin Benedetti
Latest answer by Kristin Benedetti
May 21 | 14 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 4013 Texas St UNIT 7, San Diego, CA Home For Sale
    4013 Texas St UNIT 7, San Diego, CA 92104

     For Sale: $279,000

    • Beds: 2
    • Sqft: 714
    • Baths: 1.0
    • Lot: --
  2. 2574 Fern Valley Rd, Chula Vista, CA Home For Sale
    2574 Fern Valley Rd, Chula Vista, CA 91915

     For Sale: $749,000

    • Beds: 5
    • Sqft: 3414
    • Baths: 4.0
    • Lot: 6520
  3. 4080 Front St APT 210, San Diego, CA Home For Sale
    4080 Front St APT 210, San Diego, CA 92103

     For Sale: $440,000

    • Beds: 2
    • Sqft: 1075
    • Baths: 2.0
    • Lot: --