Advisability on going into contract before renov completed?

I just had buyers who purchased in mid-build out of a two family brownstone that was getting gutted. My advice: wait. A lot of promises were made and I beleive corners were cut but it made the entire process into a more heightened stress test for both buyer and seller. Would have been more worth it to just wait and see it finished.Nothing stays the same from start to finish on a complicated renovation.

primebrooklyn

in Brownstoner Renovation 13 years and 3 months ago

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klarkash | 13 years and 3 months ago

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Looking for opinions of the advisability on going into contract on a property while the renovation is still ongoing. We’ve been told this would greatly complicate the contract. Obviously we’d want an attorney with lots of directly relevant experience. What would be some other specific concerns in this type of situation?   Thanks.

Hill | 13 years and 3 months ago

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I’m a seller who’s doing some finishing construction work. It does make things a bit complicated and I have noticed that most buyers are hesitant to get into contract. Since I have been doing construction for a while and is in the final stage, I will wait till it’s over. But so far I have introduced my contractor to all the prospective buyers and discussed all the job warrantee and etc openly.

southernslope | 13 years and 3 months ago

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Does the work need to be signed off? Could be a pain if issues arise and you are not the person who paid for the original work. We had money in escrow around incomplete construction and sign offs. I anticipated stress but it was way more stressful than I anticipated. I guess in the end a contract is only as good as the people who sign it. We would have had to sue the buyers to claim the entire escrow, which should have rightfully been ours. Both parties have to agree to release the money. In the end we negotiated to give them a portion so that we could be done with the whole thing. A little piece of experience from our stress pie….

slopefarm | 13 years and 3 months ago

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YIKES! Someone alerted me to this question and I had to rush over. Been there, done that, as a buyer and I will NEVER do it again. If you sign a contract with work unfinished, seller has every incentive to cut costs and therefore corners. We ended up in a suit about this and there is no way you can cover every possible bit of shenanigans in a contract. Of course, flippers always have temptation to reno on the cheap the parts you can’t see, but that temptation intensifies when the price is fixed by contract. We specified the exact work to be done, the exact permits to be obtained, etc. and seller still tried to put a major fraud over on us. Not saying your seller is a shyster, but the risk is there in this kind of a situation. If you do decide to go ahead, you want not only an exact list of work and the standards to be followed, but the right to visit any time, unannounced,while work is being done; to be shown plans and plan amendments before the work is done with right of sign off; a regular schedule of meetings about the nature and progress of work with seller and seller’s GC, etc.

brooklynhome | 13 years and 3 months ago

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We signed a contract with work unfinished and mostly it was ok although there were a few big glitches.  We visited a lot, had lists and timelines in the contract and negotiated many details through our lawyer.  Foolishly, we did not insist on a 2nd inspection after the work was completed and there were some things that we overlooked that an inspector would have picked up which caused us major headaches. Some of the work was finished the day before closing which I would never let happen again because we were so focused on checking the finished work that we missed the regular things to look for at closing such as appliances and such.  They damaged the floors the day before closing and I didn’t even notice because I was so distracted with the other work.  Very dumb. Anyway, I might do it again if I had money in escrow for the new work and demanded a proper 2nd inspection and insisted that the closing not be rushed.