Who is responsible for the condition of the house until closing day?
Do you know who is responsible for the condition of the house is in on closing day? You probably think that’s an easy question to answer. But it really is not, because it depends on the circumstances.
This time, the circumstances were quite common: a house that has been for sale for 2 years. An absent owner, the wife’s sister cleans the house just only so often. Even though the condition the house is pretty good, only 10 years old, it looks abandoned. All this time, the seller is paying two mortgages.
The poor seller suffered too much during the sale of the house after they moved to the States. They had taken their furniture to the States, so the house was totally empty, which doesn’t show too well. A couple of floodings and the neighborhood guards using the master bedroom (the only bed in the house). The repairs, to keep the condition of the house presentable, cost quite a bit of money.
Several times, they forgot to pay the water bill and the water got cut off. When you live in another country, it’s a hassle to get the water reconnected.
Because of the condition of the house, we were only getting low-ball offers, no matter what we tried.
The home had this beautiful bar, a real man cave. Every possible buyer’s wife insisted that her husband would not buy a house with a man cave. So we had to get rid of the bar. See the pictures.
Finally, the seller decides, on my recommendation, to accept a low-ball offer made by a buyer. He understood that it could take more time to sell, especially taking the condition of the house into account. The buyer is getting a great deal, about 30% reduction of market price, much less than any repairs would cost. But that was his advantage of buying at the right condition of the market.
I ask the buyer if he wants a home inspection but he shows no interest at all. Local buyers don’t do home inspections, not even when I insist, no matter what the condition of the house is.
The buyer needed bank financing, but fortunately, the bank, as well as the buyer, were diligent in their actions. The home inspection went like a dream.
The owner’s wife needed to fly in for closing. There was still some furniture to be taken out. Then do a nice clean-up job for closing.
On closing day, the buyer and I did the customary walk-through before we go to the bank. The seller’s wife is still running around in an Uber taxi, doing all kinds of last minute errands.
The house is still dirty and not even broom clean. There is no water, the water was shut off by the water company. There is a water reserve tank but the pump is not functioning. The hot water tank is not functioning either as the battery of the timer is long dead of non-use. The buyer is mad that nothing is working and that the house is dirty.
We’re on our way to closing, so I promise the seller that I will take care of getting the water connected as well as the water pump and hot water tank functioning. At closing, I ask the seller’s wife to go pay the water and get it reconnected immediately after closing.
That same afternoon, I went to the house with a handyman and get the pump going again. We forgot to bring batteries for the hot water tank timer.
The next morning when going to set the timer, I see water gushing from under the laundry room door. Clearly, the water company reconnected the water and someone had left a faucet in the maid’s bathroom open. Thankfully only the maid’s room and laundry room were flooded and there was very little damage. Before I was able to clean up, the buyer arrived to pick up my key.
I’ve had to censor his response when he walked in. He did say he should not have closed before we got it all in order and that I was responsible for the damages.
How to write up the offer
When we write up an offer at GoDutch, our standard offer carries the following statement:
The SELLER acknowledges that during the term of this option to purchase – sale agreement and prior to delivery of the property to the BUYER the maintenance of the property is the sole responsibility of the SELLER.
As such, the SELLER must maintain the whole property in the same condition as it is today, including every structure located on the property, landscaping, and gardens and including all but not limited to the water holding tanks, septic tank, and swimming pool and its equipment to be able to function normally.
If any maintenance is required to restore the property to the condition which it was prior to closing then it shall be the sole responsibility and expense of the SELLER. Furthermore, the house needs to be delivered broom clean on closing day.
A watertight system
This more than enough answers the question of who is responsible for the condition of the house on closing day. Years of experience making closings happen smoothly has made it possible to come up with a pretty watertight system.
Unfortunately, just a couple of weeks ago, I found out our system wasn’t so watertight. First, we had no water and then we had too much water. Just because I ASSUMED.
I felt bad for the buyer, not because I made a mistake, but because of the hassle of it. It is most important that buyer and seller are happy after closing. I do learn from my own mistakes and other’s. Next time, I will probably suggest not to close until it’s all perfect, so nobody shoots the messenger. If you are interested in hiring a professional real estate broker who does make mistakes, once in a while, contact us.
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