Forum

Short Sale Inspection Question

Posted by T Arnold on June 11, 2011 at 5:41am in Short Sale Discussions

I am the seller, short sale, condo at beach, where it's damp for months, in California. I never lived in the property.

We have bank approval, and upon home inspection it was noted on report: moisture meter read moisture in wall behind toilet. Recommend further investigation to determine cause and extent of repair. Would this be an HOA issue? No mention of toilet leak nor was there any mention of water stains on the wall.

The buyer's agent told my agent that the moisture issue needs to be totally resolved and "taken care of" before they will remove contingencies. I suggested to tell the buyer's agent that according to report we do not know the cause or extent, and that the buyer needs to get further inspections if they want, and I brought it to the attention of HOA, since is could be an HOA issue to address and remedy. Buyer's will not pay for further inspection and they just want it fixed. This is a short sale!!! I have no money! My own agent is also pressuring me to "handle this". I honestly don't know what they expect me to do? Any suggestions or thoughts? Is this an HOA issue if there is moisture in the walls or window sills?

You need to be a member of Short Sale Superstars to add comments!

Join Short Sale Superstars

Email me when people reply –
Follow

Replies

  • T Arnold June 29, 2011 at 4:11am

    Hi,

    Thank you to everyone. The end result was that the Buyer walked on the 17th day, even though I offered to pay for moisture remedy repair. I had two different moisture remedy guys check it out, both diagnosed it to be over spray from the shower, and no mold was found.  It was not a big deal but unfortunately it was to the Buyer.

  • ElizabethWeintraub00697006LyonRE June 12, 2011 at 11:10am

    This is the part of short sales that makes my hair stand on ends, and I am not standing there with my finger in an electrical receptacle. The hardest thing to get a buyer to understand is there are no repairs on a short sale -- no renegotiations, no price concessions because the bank will reject them. Moreover, the bank doesn't want the seller fixing anything, either, because if the seller has any extra money, the bank wants it. It's a Catch 22.

     

    However, it sounds like you really want this to close and do not want to start over with another buyer. You also do not want to ask the bank for a price reduction because that is just wasting precious time and the answer will be no anyway. The first thing to do is find out what the problem is, which probably means hiring a plumber to look at the plumbing. Most plumbers these days charge for an estimate or a trip charge, but how bad could that be? Less than a hundred bucks, probably. I imagine you are probably responsible for the plumbing halfway in the wall on your side. That's how I see many HOAs write that description. 

     

    If the moisture is coming from the window, close it, and get a written statement from the plumber that it's not in the wall. If it's in the wall, your agent has given you the best advice: fix it. Maybe it's just a leaky shut-off valve. There's not much that can go on behind a toilet. I mean, nobody is nailing artwork to the wall back there. When all is said and done, you can be right as rain and out a buyer or just suck it up and handle it and close.

     

    Elizabeth Weintraub

    Broker-Associate #00697006

    Lyon Real Estate

    Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

  • Stephanie Sabo June 12, 2011 at 5:21am

    I agree with Bryant and Harry. You should check your HOA CC&Rs (Convenants, Conditions & Restrictions) documents to be sure who's responsible for maintenance and repairs inside the walls. Typically the responsibility for plumbing etc. inside the walls is the homeowners.  However sometimes the HOA is responsible for it, so it may be their responsibility to repair.  Also, you should check that the leak moisture is not coming from a leak or water damage from an adjacent unit or from the roof (happens a lot). This could also put the onus on another party.

    I would suggest trying to lower the price and get the buyer to take it as-is, if possible. Have your agent submit the lowered price to your lender along with the inspection reports to explain the "as-is" price reduction.

     

  • T Arnold June 11, 2011 at 9:53am

    Thank you Harry and Bryant for your replies. I'm going to have it inspected by moisture remedy service to try to find cause and have it repaired if it's not a fortune. The HOA will will address and look into it, but I highly doubt any resolution prior to closing date of June 26th. The buyer is cash investor, new to this, and buyer's agent is treating like a standard sale. Above the toilet is a slated window, and one of the slates is missing. We're thinking condensation? This is a tough situation, as problem could be simple, but maybe not. Im trying to keep buyer from walking because of disclosure issue to any new buyers.

    Harry Clay said:

    Moisture in the wall behind the toilet could be as simple as a small localized pin-hole pipe leak, i.e. easy to fix.

    But it could also be coming from another unit on a 2nd story above, or a unit adjacent.

    It could be coming from the outside, through the stucco & building paper, or down the walls from a leaking roof due to inadequate flashing.

    Your "As Is" short sale buyer is now demanding that you perform exploratory surgery & remediation on a problem that very well might be the HOA's responsibility.

    Unfortunately, getting the HOA to respond in a very limited timeframe may be difficult, especially if it involves multiple units, or substantial cost.

    You're in a tough poker game, because if you have a Notice of Default with an active Auction date, it's quite debatable whether the lender will wait around for the HOA to respond.

    You could dare the buyer with a 'How bad do you want the property?" response, throwing it back in his lap.

    But if he walks, you would now be obligated to disclose this unresolved problem to subsequent buyers.

    At a minimum, I think you're going to have to cut into the wall from inside your bathroom, & determine if the water intrusion is local, & if it is, fix it right away, & then fix the drywall on your way out.

    That's quite possibly the only way you're going to save the deal with your current buyer.

    If the moisture problem in the walls is determined to be more consequential, & affecting multiple units (as is not uncommon in condominium developments) this could be a deal breaker as to a short sale, in which case you might have to consider letting the bank foreclose, & let them deal with the eventual solution.

    I know that there were a number of condos in Santa Clarita that were involved in class action lawsuits because of faulty plumbing, that took years to resolve. Under CA law, latent defects not readily observable are the responsibility of the original contractor for up to 10 years after date of installation. But getting the issues resolved took years of litigation.

    Let's hope that's not the case in your current situation.

  • Bryant Tutas June 11, 2011 at 6:33am
    The very first thing I would do is get a couple of estimates. It may not be as big an issue as you think. Get a couple of plumbers over there to check it out. In order to solve the problem yo have to know what it is first. My guess is that it's a minor repair. If there were a major leak they would have noted rot and mold. A moisture reading is very common and usually minor.
This reply was deleted.
********************************** like buttons ************************