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A couple of my customers are attempting to buy a lakefront cabin, but the seller and the seller’s realtor are doing some questionable things.
The property includes about 100 feet of lakefront, with a dock, a boathouse, a two-room cabin, and an outhouse. It’s been on the market for about two months. In that two months, the seller has dropped the asking price twice, from $105,000 to $95,000, and now to $75,000. When it reached $75,000, my customers decided they wanted it and agreed to pay the $75,000.
I took the application and sent a pre-qualification letter to the realtor. The customers went the next day to sign the purchase agreement. They told me afterwards that, although they signed the purchase agreement and put down a deposit, there was no well or septic disclosure. The realtor relayed to them that the outhouse may just be a hole in the ground. Normally, there would be a holding tank. And since it’s 50 feet or less from the lake, that’s a huge issue. (That’s also ignoring the fact that there’s a well on the property, too.)
In our county, any property sale that has a septic system on it has to be inspected before it can be sold. If the system is non-compliant, the seller has to pay to get it upgraded, either before the sale or by setting the money aside in escrow with the title company. The amount escrowed is typically 120% of the estimate for repair. And again, this is the seller’s responsibility.
The well could be another issue here. The seller said the wellwater hasn’t been tested and isn’t intended to be used for drinking. I don’t think there’s a requirement that the water be tested, but the realtor should know. (He should know about the requirement for the septic to be inspected, too, but the buyer had to find out from me and the county website.) The buyers don’t consider this as much of an issue since they don’t intend to use the well water for drinking.
The current issue is that the realtor emailed an updated page from the purchase agreement to the buyers along with the well and septic disclosure pages, and they’re contradicting each other. The PA page says there’s no well or septic and that there’s no addendums to the PA. But the well disclosure says there is a well, but it hasn’t been tested. And the septic disclosure simply says “NA”, which is inaccurate.
I encouraged the buyers to go back to the realtor and say that the PA needs to be corrected. My bank won’t accept a contradictory purchase agreement, and neither will the title company.
My customers told me the realtor is leaving, so he may be attempting to push the sale through as quick as possible so he can get the commission before he leaves. That would be fine - we'd be willing to get to closing as fast as possible - but we need all the correct documentation in order to do so.
I hope this doesn’t cause the purchase to fall through. If nothing else, it will delay things.
The property includes about 100 feet of lakefront, with a dock, a boathouse, a two-room cabin, and an outhouse. It’s been on the market for about two months. In that two months, the seller has dropped the asking price twice, from $105,000 to $95,000, and now to $75,000. When it reached $75,000, my customers decided they wanted it and agreed to pay the $75,000.
I took the application and sent a pre-qualification letter to the realtor. The customers went the next day to sign the purchase agreement. They told me afterwards that, although they signed the purchase agreement and put down a deposit, there was no well or septic disclosure. The realtor relayed to them that the outhouse may just be a hole in the ground. Normally, there would be a holding tank. And since it’s 50 feet or less from the lake, that’s a huge issue. (That’s also ignoring the fact that there’s a well on the property, too.)
In our county, any property sale that has a septic system on it has to be inspected before it can be sold. If the system is non-compliant, the seller has to pay to get it upgraded, either before the sale or by setting the money aside in escrow with the title company. The amount escrowed is typically 120% of the estimate for repair. And again, this is the seller’s responsibility.
The well could be another issue here. The seller said the wellwater hasn’t been tested and isn’t intended to be used for drinking. I don’t think there’s a requirement that the water be tested, but the realtor should know. (He should know about the requirement for the septic to be inspected, too, but the buyer had to find out from me and the county website.) The buyers don’t consider this as much of an issue since they don’t intend to use the well water for drinking.
The current issue is that the realtor emailed an updated page from the purchase agreement to the buyers along with the well and septic disclosure pages, and they’re contradicting each other. The PA page says there’s no well or septic and that there’s no addendums to the PA. But the well disclosure says there is a well, but it hasn’t been tested. And the septic disclosure simply says “NA”, which is inaccurate.
I encouraged the buyers to go back to the realtor and say that the PA needs to be corrected. My bank won’t accept a contradictory purchase agreement, and neither will the title company.
My customers told me the realtor is leaving, so he may be attempting to push the sale through as quick as possible so he can get the commission before he leaves. That would be fine - we'd be willing to get to closing as fast as possible - but we need all the correct documentation in order to do so.
I hope this doesn’t cause the purchase to fall through. If nothing else, it will delay things.
I didn't let him snow me, though. I said I want the customers to buy the place, but I need to make sure everything's in order, first.
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