Renegotiating During Your Option Period

Its a tough thing, but sometimes a real estate deal looks good on the outside, but after inspection it just doesn’t cut the mustard. This is exactly what happened in our current real estate deal. We put 5 units under 3 separate contracts, and 1 of those contracts was for a single family home. The other 2 were for duplexes. Upon initial inspection, the inspectors shocked us with a repair number of at least $20-30k for the single family home. That number blew the cap on the deal, so we had to drop that house. But the other 4 units did not need as much in repairs, and still fit the equation.

The problem in this deal was that the single family home and one of the duplexes shared a water meter, and thus, the sellers put a clause in the special provisions section of the contract that forced these two properties to sell together. This prompted a good chance for renegotiation. So we asked the sellers to pay to put in a new water meter, and we would go through with the purchase of the duplex. Their counter was that they would pay for the installation of the meter itself, and we would pay for the labor to separate and re-route the water supply up to the meter. We agreed, and thus, we were able to save a very strong cash flowing property for minimal additional expense.

The key thing here is, ALWAYS ASK! If you can salvage a deal with some additional concessions from the seller based on unforeseen circumstances, it is always worth asking. All they can say is no, and you can move on to the next deal. If they say yes then hey, you just saved a deal you invested time and money into.

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