Seller canceled at day 19 with the buyer-side money already spent

Contract at 212k on a 1970s three bed with a bad roof and a tenant on month to month. Comps supported 305k fixed. I'd sourced it off a stacked list, pre-foreclosure filing plus long tenure plus absentee, and I was the only person who'd called her that week as far as I could tell.

My contract had a 21 day inspection period because I wanted room to walk. Earnest money was $500, refundable inside that window, which she agreed to without blinking. That should have told me something.

Day 12 I brought a contractor and a potential buyer through together. Day 14 the buyer wanted a price adjustment on the roof and I went back to her with 198k. Day 19 she emailed that she'd decided to list with an agent who had knocked on her door.

Out of pocket: $340 for the contractor's walkthrough, $2,100 on a photographer and a small paid push to my buyer list because I was trying to build the list at the same time, and about five weeks of attention I could have spent on the other 40 records in that pull. Call it $2,440 and a month.

What I'd do differently: I'd stop bringing a buyer through as a buyer before I'd earned the seller's trust, and I'd have asked for a shorter inspection window with a larger deposit so the paperwork actually held. What I'm less sure about is whether the retrade was the real mistake or just the thing that gave her a reason.

Answer

2aaron_fitz10 Get yoursPRO6

Pulling the threads together, because I think flint, harrow and keystone are each holding a piece.

The deal was already fragile on day one. $500 refundable, 21 days, and no explanation of who you were or what you'd do with the house. Everything after that was you spending her patience. The contractor visit spent some, the buyer walkthrough spent more, the 198 spent the rest. The agent knocking on the door wasn't the cause, that agent was just standing there when the balance hit zero.

The fix isn't a bigger deposit on its own, though I'd do that too. It's that you never told her what you were actually doing. Being the only buyer at the table is worth something only if the person at the table trusts the buyer. If you'd said on the first call, I buy houses in this condition, I usually bring in a partner to do the work, here's how the timeline goes, then the contractor and the buyer walking through are consistent with what you said instead of confirmation that something's off.

On your open question, the retrade was the mistake, and it was made possible by the soft contract. I'd take a 7 day inspection with real money down and price the roof from the driveway. If you can't price a roof from the driveway on a 70s ranch, bring the roofer before you sign, not after.

6 replies

1kevin_lombardPG1BPRO5

I've gone over this a couple of times. You went back at 198k on day 14, so was that the first time she'd heard a number other than 212? I'm trying to understand whether the cancel was about the money or about being surprised.

1joe_delgado5AP4CPRO6

The retrade is the whole story, compass. You dropped 14k on a woman who was already in pre-foreclosure and already scared, six days before she had to decide. She didn't need the agent to be better, she just needed a reason to stop feeling worked.

I've done exactly this. Contract at 96k, went back at 88k after a foundation guy scared me, seller told me to lose her number and sold to a neighbor's cousin for 91k. My margin was fine at 96. I gave up a deal to protect 8k that I didn't need.

If the roof was visible from the street, and on a 70s house it usually is, you should have priced it before you signed.

1megan_doyle15 Get yours

Genuinely asking, what is a retrade? I've seen it three times in this room and I've been guessing from context.

1omar_haddadActivePRO11

rigging, it's going back to the seller after you're under contract and asking for a lower price because of what you found. Sometimes legitimate, often not.

compass, the part I'd flag is the walkthrough itself. You put a contractor and a stranger in her house on the same day. I do renovation and I can tell you what that looks like from the seller's side, two guys pointing at ceilings and talking about her house like it's already sold. I bring one person, I introduce them by name, and I tell the owner in advance who's coming and why. Costs nothing and it stops the meeting where they call their sister that night and say I don't like this.

1samantha_ruizAU4APRO6

Half agree with flint. The 14k drop was rough, but a seller in a real time crunch usually takes the certain money over the maybe. What she didn't have was any reason to believe you'd close. $500 refundable and 21 days reads exactly like a person keeping options open, and she could read it too.

I moved to $2,500 going hard after seven days and my cancel rate fell off a cliff. Not because sellers can't back out anyway, they can. It changes how the whole conversation feels.