Please help me figure out what to do with my rental

[Omy]

It's a bit intimidating to put that much money in without any guarantees of getting it back out, but if everything works out it will be a decent return on investment.

The first offer came in an hour after the first showing. Part of me thinks we should ratify quickly, but it came in so soon that we're now feeling a bit greedy and want to see if anything better comes along. Hope that doesn't bite us in the rear end....

[Omy]

So...2nd offer is $10k more than the first offer (and settles 10 days sooner) but the offer expires at 5 PM today. It's about as high as we are likely to see the home appraise for. Higher offers would likely have to bring cash to bridge the appraisal gap.

While I don't like playing the expiring offer game, we're thinking about accepting it rather than holding out for something better. Any thoughts on this are appreciated!

[eddy20]

Take the money and run! Is it worth holding out for another 5-10K, in the long run that kind of money won't mean much.

[Dicey]

If they can settle sooner, it probably means they're pre-qualified with a lender, which is a plus.

[FINate]

Congrats on getting to market quickly and getting offers. FWIW, we took "option #4" several years ago and took the tax hit to get out of our rentals... it was totally worth it.

Don't get greedy. The best offer isn't always the highest, especially if it means higher offers run into appraisal issues. If you have a strong offer that's on the higher end of expectations then take it.

[Omy]

Thanks for your responses. We countered slightly and they didn't like it, so we are going to review offers after the weekend showings and open house.

The buyers' agent had told us the offer was not contingent on a home inspection, but then added a line that buyers have the right to an inspection within 4 days of acceptance.

We crossed out that line, and they balked. They said they only wanted an inspection for information purposes only.  In my experience, this is an informal way to open up negotiations and potentially void a contract while burdening the seller with potential disclosure issues.

We are in an insane seller's market with bidding wars and truly noncontingent offers, so it didn't make sense to take ourselves off the market early for a contingent offer.

[eddy20]

I'm an agent and if we made an offer and the seller would not accept an inspection I would recommend that my clients look elsewhere that would be a GIANT red flag for me when representing buyers. 

[Dicey]

I'm an agent and if we made an offer and the seller would not accept an inspection I would recommend that my clients look elsewhere that would be a GIANT red flag for me when representing buyers.

Are you in the habit of making non-inspection-contingent offers in hopes of getting them accepted early and then changing them? I personally agree with what you're saying, but your thinking doesn't seem to match the facts as presented in this situation.

We have purchased several homes without inspections, but we're experienced buyers/rehabbers. DH is in the trades and can read a house like a book. I don't recommend that most people buy this way, nor do I recommend that they take a home inspection report at face value.

It's tricky.

[Omy]

On Monday, we will consider all offers. We already have an offer in hand that is $10k over asking and doesn't have an inspection contingency.

On Monday, I may be willing to take the offer that is $20k over asking but wants an inspection. But I don't see the benefit of canceling the weekend showings and open house to accept an offer contingent on an inspection right now.

I was an agent for 15 years. I agree that a good inspection is important for some people. But if I'm in a market that will give me non-contingent offers, why wouldn't I take one?

Edited to add:

The buyers' agent keeps insisting that it is NOT contingent...that they just want the inspection for budgeting purposes and do not intend to negotiate or void the contract.  This is the current game being played to get inspections included in a market where non contingent offers are the norm. If they find any issues, they just get out of the contract on HOA doc review.

[eddy20]

I'm an agent and if we made an offer and the seller would not accept an inspection I would recommend that my clients look elsewhere that would be a GIANT red flag for me when representing buyers.

Are you in the habit of making non-inspection-contingent offers in hopes of getting them accepted early and then changing them? I personally agree with what you're saying, but your thinking doesn't seem to match the facts as presented in this situation.

We have purchased several homes without inspections, but we're experienced buyers/rehabbers. DH is in the trades and can read a house like a book. I don't recommend that most people buy this way, nor do I recommend that they take a home inspection report at face value.

It's tricky.

No, I would never make an offer without an inspection contingency. Also I would never make an offer with no inspection and then change that requirement to read inspection required, that's unfair to the seller. I'm just saying I would always highly recommend an inspection contingency and if the buyers I'm representing want to buy without and inspection contingency they would have to sign and approve stating no inspection. I have been a licensed agent for over 40 years and have seen some deals and agents being sued for allowing buyers to buy a property with out and inspection. One particular case was a home for 1.8 Mil and looked great and the inspection was waved; come to find out after closing the home required $350,000 of foundation work and the agent and the broker were both sued and in court for 3 years. Personally not worth my time to deal with that kind of transaction.

[Dicey]

I'm an agent and if we made an offer and the seller would not accept an inspection I would recommend that my clients look elsewhere that would be a GIANT red flag for me when representing buyers.

Are you in the habit of making non-inspection-contingent offers in hopes of getting them accepted early and then changing them? I personally agree with what you're saying, but your thinking doesn't seem to match the facts as presented in this situation.

We have purchased several homes without inspections, but we're experienced buyers/rehabbers. DH is in the trades and can read a house like a book. I don't recommend that most people buy this way, nor do I recommend that they take a home inspection report at face value.

It's tricky.

No, I would never make an offer without an inspection contingency. Also I would never make an offer with no inspection and then change that requirement to read inspection required, that's unfair to the seller. I'm just saying I would always highly recommend an inspection contingency and if the buyers I'm representing want to buy without and inspection contingency they would have to sign and approve stating no inspection. I have been a licensed agent for over 40 years and have seen some deals and agents being sued for allowing buyers to buy a property with out and inspection. One particular case was a home for 1.8 Mil and looked great and the inspection was waved; come to find out after closing the home required $350,000 of foundation work and the agent and the broker were both sued and in court for 3 years. Personally not worth my time to deal with that kind of transaction.

In a hot market, sometimes it's just what you have to do to get your offer accepted. If I was an inexperienced buyer in a crazy market, I'd probably just wait it out.  I do realize  that's easy for me to say, as I already have a house ;-)

When we bought our primary home, we waived inspections and signed just such a document. It was a custom built spec home. The builder overspent, the market turned and he had to short sell it. There were numerous small things that hadn't been completed. Ex: no drip edges had been installed. The retaining wall was backfilled with base rock, not drain rock, and it failed. These are things an inspection might not have revealed anyway, and these projects keep DH busy between...other projects.

BTW, we are friendly with a number of local Realtors. After years of market insanity, they are all anticipating lawsuits. Everyone has increased their E&O insurance and is hoping for the best.

[Omy]

So...offer number 2 revised their offer down $3k (which was still $7k over offer number 1). They formally added an inspection contingency AND moved settlement 3 days later.

So we decided to counter offer number 1 since they seem super motivated and haven't played any games so far. They agreed to the higher price (and have no inspection contingency) so we are off and running!

[Omy]

It appraised at the escalated amount with no conditions. Yay!

Wood Destroying Insect report revealed carpenter bee holes on the deck, so we're on the hook for treatment and filling of holes.
Delivered HOA docs to buyer today, so they have 7 days to void the contract should they get cold feet.

[Kwill]

It's always great to see updates, thank you. Good luck!

[Omy]

Sold it last week...woohoo!

[Dicey]

How did the resolution of the carpenter bees issue get resolved?

[Omy]

Pest guy charged $145 to puff something dusty into the holes and filled the holes with wood filler. Before I sell another house, I will remember to fill the carpenter bee holes before it goes on the market. What a racket.

[Dicey]

The condo above ours has them above their door. We thought it was going to be a PITA to deal with.* Hopefully not, based on your experience.  Thanks!

*Condo is for bonus kid, who is neurodivergent. DH is on the HOA board to keep tabs on things as it transitions fron rentals to ownership.

[Omy]

The trick is to fill the holes before you go on the market. Once you have an official Wood Destroying Insect report calling it out, the lender will require professional treatment and repairs. If the holes have been filled, there's nothing to address.

[Dicey]

The trick is to fill the holes before you go on the market. Once you have an official Wood Destroying Insect report calling it out, the lender will require professional treatment and repairs. If the holes have been filled, there's nothing to address.

The buildings are clad with cedar shingles, so it might be a little trickier.  Fingers crossed the solution is still easier than we fear.