Deadline Drama: When Moments Count

I have been working on selling a difficult investment property to some buyers.  I placed the home under contract with my first buyer and after we determined half the floor joists were ruined, he excused himself from the transaction.  I placed the home under contract again a second time with another buyer.  This buyer obtained further bids on repairs and was uncomfortable with a settling crack in the foundation.   He excused himself from the transaction.

Undaunted, I presented the property to a third buyer.  I reviewed the property's known deficiencies with him and we proceed forward.  Our due diligence deadline was three weeks from our contract date.  We gave ourselves an extra week due to the Thanksgiving holiday.

We began getting repair bids for plumbing, HVAC, roofing, structural repairs, and landscaping.  One issue was that the gas was not turned on to the property.  We couldn't check out the furnace.  I contacted the property manager two weeks prior to our deadline and told him that we needed the furnace turned on so the pipes didn't freeze.  He concurred.

Well, it appears that conversation was forgotten because four days prior to our due diligence deadline the gas was still off...with the water still turned on to the property...in December.  Fortunately, our mild winter prevented any damage.  However, we still hadn't had the furnace checked.  All our other bids checked out and finally with three hours before our deadline left, our HVAC tech tells us that the furnace is at the end of its life and needs to be replaced.  That was unexpected.  My buyer asked for a $2k a price concession even though we had already negotiated the "rock bottom" price that the seller was willing to go.

We quickly submitted our request.  The listing agent said she would get back to me quickly.  An hour passed. Since my client's earnest money was on the line, I forwarded him a Contract Cancellation that we planned to submit 15 minutes prior to the contract due diligence deadline if we had not heard back from the seller.  At 15 minutes to our deadline I called the agent.  She still didn't have word.  I notified her of our intent to cancel if we didn't get a response.  With 10 minutes to our deadline I called her again, she said the seller agreed to the concession and would have the addendum signed and to us in a half hour.

My fear at this point was that with our backs up against the wall the seller would reconsider after our deadline had passed.  In our business we live and die by our paperwork.  So,  I suggested to her that a 30 minutes wasn't good enough.  I asked her to have it to me in five.  Three minutes later we had our signed addendum.

This experience was a good lesson in the importance of contract deadlines and the importance of paperwork.  Earnest money keeps the parties interested in the contract and acting in good faith to move the contract forward.  I am glad we were able work out the final wrinkles in our transaction and move forward...even if by the hair on our chin.  Now on to closing...