Closing without electrical DOB sign off

I’m negotiating a contract to buy a house that is in the process of being renovated in Bed-Stuy. I’m getting a better deal because the owner wants to close before the electrical meters are installed and the gas line is not signed off yet by the city. The work on the house is of high quality, I had an inspector look at it already. The owner will put twenty to thirty thousand into an escrow account until the city signs off on the work. The owner also wants to close before the end of the month no matter what. (Stipulated in the contract) My lawyer is nervous and decided he won’t do the deal with me, so I have to get another lawyer. I don’t think he works a lot in Brooklyn, but his departure makes me nervous. Seller also wants ten percent down on signing of contract. Any advice?

SleepyJean

in Co-Op Related 12 years and 4 months ago

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SleepyJean | 12 years and 3 months ago

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Thank you all so much for your input on this. It has made me feel much better about my decisions going forward. I have been and will continue to be in negotiation with the seller and will insist on everything being signed off by the DOB before I close. To answer slopemope, my previous lawyer did spell out the risks to me, he advised me against going into the deal, he didn’t like the way the deal was going and his departure was what lead me to post on this forum. I agree it sounds shady when written down in black and white. Thank you so much for your detailed response. I am forewarned, feel much better about the process going forward, and am in no rush to sign anything.

slopemope | 12 years and 3 months ago

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“My lawyer is nervous and decided he won’t do the deal with me” What is really going on? What are/were his concerns? Not only does the deal small a little fishy, but so does the wording of your post. You can’t really rely on an inspector with a visual, that’s for sure. Having said that, i’ve heard of electrical inspections happening over a year after the contractor thought the job was done and they never heard from DOB. They just showed up one day and (of course) work was required. That’s the reality of the environment we are living in. I don’t have a problem if you can stipulate that the escrow is by your lawyer and the bank that you choose, but to say your lawyer “won’t do the deal with me” is strange. Why not give detail? To answer you, no i would not sign anything nor give any deposit unless a competent lawyer spelled out the risks for you. People have done this before, however, if financing is involved i would not be certain you could close on the deal when the reno is not signed off. And, then you get into legal mumbo jumbo, as well as getting your deposit back. (note: sellers rarely want to give the deposit back if you can’t close on the financing, because they know you’ll have to spend a lot of $$ in legal bills to get it back – unless you have a ultra bulletproof contract saying so.)

kidbklyn | 12 years and 4 months ago

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It’s only a good deal to the extent of any potential problems only runs to the maximum of $30,000 in escrow. After that it’s all on you. You should at have some idea want the worst case scenario could cost you. Then you can decide if you really have a bargain or a potential problem. A problem that you can’t or don’t want to handle.

webby1000 | 12 years and 4 months ago

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Also, very important, if you for some reason go through with this, make sure the escrow money is with your lawyer, not his.

webby1000 | 12 years and 4 months ago

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I know you think you might lose the deal, but you are a “bird in hand” to the seller so don’t feel pressured by him. You won’t be able to move in or rent out the place before this work is done, so you are also going to be paying carrying costs until the work is complete–perhaps eating up any “savings” you recieve by signing early. DO not believe him when he tells you he has another buyer if you don’t commit. I’ve been through this before and later realized how naive I was. Just keep looking while he is finishing the work–something better might pop up.

cate | 12 years and 4 months ago

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Everything needs to be finished, inspected, and signed off on before you close.

eman134 | 12 years and 4 months ago

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it sounds like a terrible idea…check the address on the DOB website and make sure that all permits are active and at least the rough inspection has been conducted on the plumbing and gas. A thousand things can go wrong during inspections…the plans may not reflect the actual work and may need to be amended, Everything could drag out for months and could easily run way more than the escrow account.

Closing without electrical DOB sign off

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Closing without electrical DOB sign off

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