What a Buyer Doesn’t know may Indeed Hurt Them

I’m still on vacation and trying my best to stay away from the technology that keeps me "in touch" with the real world and therefore less likely to relax (just checked my stock portfolio for first time in a week…OUCH!!!). Having said that, I couldn’t resist a jaunt to Big Kmart to pick up a wireless card for my old laptop.  Both fortunately and not so, it works, which is much more than I can say for some of the major systems in the house in which we’re staying.  This is the impetus for this post.

We’re are fortunate enough to be staying in a beautiful 4BR home with lush gardens, a pool, and community tennis in a prime location in Easthampton, NY.  The house is being sold and the new owner is taking possession in September.  I wonder if the new owner will be privy to all of the defects that are only noticeable after spending some time in the house.  We arrived this past Saturday and noticed first that the flushing mechanism in the master bath toilet needs to be replaced which is certainly something that the new owner will notice during the pre-closing walk-thru.  It’s much less likely that this new owner will discover the following:

  1. The central AC in half of the house works only sporadically and often not at all.
  2. The 220V electrical feed to the house isn’t working properly and has been an issue in the past (we discovered this only after calling the AC repairman, then an electrician, and finally LIPA who provides the electrical service for the house).  The lack of 220 prevents the the AC, pool pump, and clothes dryer from operating.  LIPA has since connected a back up generator that is pumping 220 into the house until their crew has the time to come and dig up the street to find the "break." 
  3. The sprinkler system is not working properly evidenced by the large brown patches in areas across the lawns.  It is in obvious need of repair and as it is on a timer this fact won’t likely be discovered by the new owner either.

This brings me to a very important conclusion.  As I don’t often sell single family homes with land (apartments are different because the building is responsible for most major systems), I usually suggest that my buyers do their walk-through on the morning of or just one day prior to closing.  Well no more.  This experience has made me realize that the buyer beware mantra should be recited throughout the entire buying process.  Here’s my advice:

  • I would strongly suggest that buyers do their walk-through several days prior to closing so that any major system defects can be remedied prior to closing.  At bare minimum, you can ask for some sort of "rebate" at closing assuming the contract provides for it (i.e. if you signed an "as is" contract like many buyers do, you need to consult your attorney).
  • I also think that it seems like a good idea to do a more thorough inspection of a property prior to signing a contract.  That luxury has not been available to buyers recently as multiple bidders have forced quick non-contingent contract signings.  I suspect the luxury will return.

So in three weeks, a new owner will close and move into this house and it’s quite likely that s/he will have no knowledge of some significant issues that need to be addressed.  It’s a shame s/he can’t spend a week in the house prior to closing…now that’s a dangerous concept!

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