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Acces to Property before Closing clause

Nicola

Nicola

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Just wondering how people have worded the clause for allowing access to the property before closing to show it to potential tenants.

Is it better as a term in the Offer, rather than as an addendum?

Also, what if you want your property manager, rather than your realtor, to have access?
 
If you don`t own the property yet your realtor has to be there anytime you want access. What happens if your property manager leaves a tap on or sets the place on fire or something... Realtors have insurance for that type of thing. I don`t think you could have a contract with your manager on a building you don`t own yet for their insurance to come into play.

So, if I were your agent and you wanted to do showings beforehand then the way to do it would be to have a one hour window where you get all your potential tenants to come by and have a look at it.

Word this as a term, "Buyer and buyer`s realtor (or buyers property manager) to be permitted access to the property between * and * on * and * to show property to prospective tenants"

Or you could leave it more general with something like "Buyer and buyer`s realtor to be permitted access to the property between * and * on mondays and fridays between date of final signing and completion day to show property to prospective tenants" or something of that nature.

QUOTE (Nicola @ Mar 26 2008, 08:00 PM) Just wondering how people have worded the clause for allowing access to the property before closing to show it to potential tenants.

Is it better as a term in the Offer, rather than as an addendum?

Also, what if you want your property manager, rather than your realtor, to have access?
 
QUOTE (Nicola @ Mar 26 2008, 07:00 PM) Just wondering how people have worded the clause for allowing access to the property before closing to show it to potential tenants.

Is it better as a term in the Offer, rather than as an addendum?

Also, what if you want your property manager, rather than your realtor, to have access?
Hi Nicola,

It should be a term in the offer, not an addendum.

The wording I use, and have never experienced any push-back from is this;

Seller will allow access to the property for a reasonable length of time with 24 hours notice for current or prospective appraisers, home inspectors, partners, assignees, buyers, tenants, trades and contractors, and for marketing purposes.

And for sure Brett is right, your realtor needs to be there for any of this kind of visit.


David.
 
And recognize that if the Seller, once the deal is firm, refuses to comply with this clause that you can`t do much about it.

Whenever possible you should consider including a `specified penalty` for non-compliance with a term. Having said that, this type of term is one where that would be tough to do. It`s much easier to have a specified penalty for a term like "the debris shall be removed from the back yard by the Seller before possession, failing which the Buyer shall hold back $750 pending completion of this term by the Seller".
 
I use the `hold back` term all the time after property inspections. Get the seller to bring the property up to your standards or pay an appropriate price.

Gets deals out of the conditional phase and puts numeric values to solving certain problems. I`ll have the property inspector (chosen by either me or my client) put down how much it would cost to fix it (always make sure they are generous here) so that in the event the seller gets lazy there is money held back.

KEY POINT: When writing in a hold back MAKE SURE that you put in something similar to the following text "Funds to be held in trust by the buyer`s attourney and releasable to the buyer within X days of closing should work not be performed to buyer satisfaction"

This keeps the money in the hands of YOUR lawyer which gives you better control and also authorizes them to actually pay you from their trust account in the event the seller doesn`t comply with the term. What has happened with hold backs is the sellers attourney calls BS on the holdback and keeps it tied up in the trust account while they try and work out a cheaper settlement or buy their client more time to get the work done after completion day.

Also - if you are nervous about the seller flaking on a term where there is a hold-back make sure that your realtor does a walkthrough AFTER the property is vacant and BEFORE funds are conveyed. That way he/she can get in touch with your lawyer and make sure that the selling side doesn`t recieve money they aren`t supposed to as per the contract.


QUOTE (GarthChapman @ Mar 27 2008, 05:55 AM) And recognize that if the Seller, once the deal is firm, refuses to comply with this clause that you can`t do much about it.

Whenever possible you should consider including a `specified penalty` for non-compliance with a term. Having said that, this type of term is one where that would be tough to do. It`s much easier to have a specified penalty for a term like "the debris shall be removed from the back yard by the Seller before possession, failing which the Buyer shall hold back $750 pending completion of this term by the Seller".
 
QUOTE (RedlineBrett @ Mar 27 2008, 11:58 AM) I use the `hold back` term all the time after property inspections. Get the seller to bring the property up to your standards or pay an appropriate price.

Gets deals out of the conditional phase and puts numeric values to solving certain problems. I`ll have the property inspector (chosen by either me or my client) put down how much it would cost to fix it (always make sure they are generous here) so that in the event the seller gets lazy there is money held back.

KEY POINT: When writing in a hold back MAKE SURE that you put in something similar to the following text "Funds to be held in trust by the buyer`s attourney and releasable to the buyer within X days of closing should work not be performed to buyer satisfaction"

This keeps the money in the hands of YOUR lawyer which gives you better control and also authorizes them to actually pay you from their trust account in the event the seller doesn`t comply with the term. What has happened with hold backs is the sellers attourney calls BS on the holdback and keeps it tied up in the trust account while they try and work out a cheaper settlement or buy their client more time to get the work done after completion day.

Also - if you are nervous about the seller flaking on a term where there is a hold-back make sure that your realtor does a walkthrough AFTER the property is vacant and BEFORE funds are conveyed. That way he/she can get in touch with your lawyer and make sure that the selling side doesn`t recieve money they aren`t supposed to as per the contract.



Awesome.
 
Great comments! Quick question for the experienced investors above:

How realistic is it to expect the seller to fix the property based on your home inspection report or provide an additional significant discount? Isn`t it more realistic to simplify it by saying something like "This offer is conditional upon the buyer obtaining a building inspection satisfactory to the buyer within 14 days from acceptance of this offer."?

I understand it`s ideal to have the seller fix the property for the buyer but again, how often does it really happen/how realistic is this expectation?

THANKS,
Neil
 
Property inspections are a PITA for realtors because every property has little issues and quite frequently both buyers and sellers over-react to the inspection reports. Takes good work on behalf of the agents not to have deals sourerd with inspections - particularly on older properties.

Now, I have saved my buyers thousands of $$ and saved myself countless hours of frustration by adhering to a few simple principles.

1. If it is a safety issue it gets fixed before my client moves in. The property inspector will tell you things like "the electrical wiring was not done to code". You need to find out if it`s a fire hazard. What I reccomend here is another simple agreement - both buyer and seller agree to a master electrician (an actual pro - unlike a property inspector) and have him/her come in and assess the issue.

- if the ME finds a problem then the seller pays for it to be fixed. If they do not find a problem then the buyer pays for the electrician`s time to come have a look. If you have a good inspector you will always have things fixed for free.
style_emoticons
Get your inspector to write SAFETY HAZARD in the report and you will have MUCH better leverage in getting a concession here.

- Same goes for plumbers, foundation experts, roofing experts, appliance guys, HVAC, soil engineers etc.

2. If you want to chisle a few $$ off here is the best way to do it.

- You get a very comprehensive list of all the things that were found - get a GOOD detailed inspector to make you a report IN WRITING that has a laundry list of things that are wrong with the property.

- You have your agent say to the seller`s agent that you are not happy with the inspection and don`t feel as good about the deal as you did before it was done. This will be the truth anyway. Cite the list of issues.

- Say you don`t want to follow through with the deal unless the following items are done (pick 2 or 3 items off the 10 item list but have them be the most expensive obviously) Say you want to act in good faith because the seller has to this point so you will look the other way on the 7 or 8 trivial items so long as the big ones are fixed appropriately.

- Say they can either sign an amendment that those issues will be fixed to buyer satisfaction prior to closing OR the purchase price can be reduced by $X. NOW don`t pick a ridiculous number. Shoot for a few thousand tops. this is a great way to get a few $ off for time and trouble. If the person you are buying from has big equity they will chose to have money off rather than go through the hassle.



QUOTE (investmart @ Mar 27 2008, 10:19 PM) Great comments! Quick question for the experienced investors above:

How realistic is it to expect the seller to fix the property based on your home inspection report or provide an additional significant discount? Isn`t it more realistic to simplify it by saying something like "This offer is conditional upon the buyer obtaining a building inspection satisfactory to the buyer within 14 days from acceptance of this offer."?

I understand it`s ideal to have the seller fix the property for the buyer but again, how often does it really happen/how realistic is this expectation?

THANKS,
Neil
 
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