Friday, November 18, 2016

Story of the Week ~ Rent-Backs & Real Estate

What's a rent back in Real Estate? When the Seller maintains possession after close of escrow. They pay the buyer the costs the buyer has for ownership during that time. The loan, any HOA fees, insurance, taxes. Utilities are paid by whomever is occupying the property.

Usually a rent back is for a short period of time. A week, 10 days. Sometimes, particularly when it's for 30-ish days, a security deposit is left in escrow. Just like when a tenant rents from a landlord. To cover any damage issues the occupant caused to the home.

So, back to the story after the explanation....

My clients are the buyers. Multiple offer situation, they agree to a 5 day possession after close of escrow, then an additional 30 days on top of that. To get the property, they say hell yes....but Seller has to, of course, pay the 30 days of buyers expenses to own the property. See description above if you're confused!

So, we do our final walk through that is the normal part of escrow...prior to closing. Seller agreed to several items to repair/correct/replace & receipts are to be presented to buyers same time. We find the door to be replaced does not all. There are no receipts presented, and the push button key-less entry has been replaced with a regular doorknob.

So, the seller says, he couldn't find the matching door. My buyers found it in 2 places, same day. Seller states he changed out the garbage disposal himself...even though the request for repairs asked for a licensed plumber, and he'll find the receipt. Seller states the push button key-less thingy didn't work so he removed it and put a regular door knob back in.

Needless to say, I'm calling some major BS here...right?

Doesn't matter, we calmly tell sellers agent that these things need to be corrected, per contract, etc. And, they do...well, so we think.

Fast forward, a few weeks after my clients finally take possession and it's about time to release the security deposit. I double check with them to see if there is anything amiss.....sadly it is determined that the seller did not install the new garbage disposal correctly. One fatal piece was not removed for that particular installation. And, damage to the kitchen cabinet was caused by the water going the wrong place. Ah, how we wish the seller had a professional installation done as agreed to.

At any rate, now we are waiting for an estimate to repair the cabinet. Buyer took apart the garbage disposal, read alllllll the directions, put it back together correctly, and the disposal is now working.

And, the sellers agent is not happy. Well, hell, neither am I or my buyers. So, security deposit will not be released until we get this resolved.

How's that for a story? 

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