Representing Greater Bostons Finest Builders and Communties
When I am representing the buyer and have asked a seller to do repairs prior to closing I always let the seller know that there will be two walk throughs.
1. The first walk through will be done 7 days prior to closing to allow the seller time to complete any thing that is not done to the standards the buyer expects.
2. We then do our second walk through the morning of the closing, and if the work is not complete we close, but ask for a hold back of double the cost of the completion of the work. Because we had taken our time to do a prior walk through we only allow the seller 48 hours to complete the work.
3. If the work is not completed within that time frame then the buyer keeps the money and does the work at their expense and keeps the overage for their pain and suffering.
I have found this format to be very motivating for the sellers. Best
You can do a hold back. Or delay the closing a few days until the work is done. I was at a final walk through where seller had left some trash, etc, in the house. The other broker and I carted it out ourselves. The point is to try and see the client through to a seamless transaction.
Sandy Balzer Tobin
Accredited Buyer Representative
The issue is a contract atty issue. If the repairs were written in the contract ( and if they are not... fire your Buyer Agent and R.E. Atty ), then the seller has breached the contract.
Usually a holdback can be arranged, since not closing is a lose-lose. You may have another deal pending on this one... the seller doesn't get their $$ and everyone ends up in court. My suggestion is to have the atty for the buyer go over the contract language with the atty for the seller... since they know the consequences. It is truly high stakes poker though, and one that a skilled atty can walk you through.
I agree with Christine, this highlights why having an exclusive buyer agent is so important when purchasing real estate.
This question highlights the importance of having a good buyer agent and buyer attorney representing the buyer during the buying, negotiation and closing process. The first step would have been to make sure that these details were covered in the Purchase & Sale agreement which, ideally, would have specifically stated what was to be done and what would happen if it was not done. Assuming that at least that the repairs were itemized in the Purchase & Sale agreement, then the buyer has a few options - (1) they can refuse to close and either postpone the closing or back out of the agreement. Ideally we all want to make the deal go through so postponement would be the better option but I would want an agreement among the parties of what was going to happen. Delaying the closing may have ramifications as far as the mortgage is concerned so it is important to touch base with the mortgage company if this is the route chosen. (2) Assuming the Seller does not really want to postpone or cancel, they could get a credit from the Seller so they can handle the repairs themselves. However, this requires quick work to determine the right amount of credit. (3) The closing attorney could hold back some or all of the Seller's proceeds until the work is done to the Buyer's satisfaction - again requiring an agreement of all the parties and the closing attorney. If there are a lot ofrepairs, then it is best to set a date by which the repairs will be done in advance of the closing & have an inspection or walk through at that time so as not to wait until the last minute. As for items left behind, then the options are similar but the most common is to get a crdit or payment from the Seller to compensate the Buyers for their efforts in having to remove the Seller's property. In all cases, the most important thing is to have a well-written purchase & sale agreement to protect the buyer in the case of this situation.
I have seen repairs being made an hour before closing too many times. I have gotten the seller and buyer to agree to escrow funds for the repairs to be made later, but as Scott said everyone must agree and some lawyers hate it because its more work for them because they must hold funds for a period of time. Your other options is to delay closing, nothing gets a sellers attention more than changing the closing date because they were not ready with the agreed repairs.