Friday, July 11, 2014
Walton, a 41-year-old attorney in Iowa City, Iowa, says she had listed her home in Joliet, Illinois, far above its appraised price because she felt that it was undervalued. "It was a beautiful house," she says. "Open space, lots of windows, very bright."
And there was one more thing, but it wasn't exactly something Walton bragged about in her home's MLS listing or online ad: The house had serious foundation problems.
"There were some pretty major cracks and a little settling — maybe a lot of settling," Walton says. "I knew it when I bought it but just asked for some money off instead of having the previous owners fix it. I guess I assumed it wouldn't get much worse and that the next buyer would make me the same deal I made the previous owner."
It didn't turn out that way. In fact, two prospective buyers bailed at the last minute because they refused to budge on who had to fix the foundation. "They didn't want money off," Walton says. "They wanted it fixed. There was no compromise."
Walton neglected to consider that the cost of repairing the foundation might have increased dramatically — and when she obtained an estimate, she learned it would run $10,000 to $15,000. What was she offering the potential buyers?
"Well, that was probably part of the problem," she says. "I offered them $5,000 off of their final offer. That's what the previous owner offered me and I had been dumb enough to take it."
Walton shouldn't be so hard on herself. She has a receipt with an estimate for the foundation work from the previous owner for $5,500. "I should have taken care of it then," she says. "The work doubled and tripled in price."
After two strikes with potential buyers, Walton knew she had to take matters into her own hands. "I found a contractor who repaired my foundation for about $11,000, and he was gracious enough to take half the money up front and the other half after I sold the house," she says, adding that the payment schedule was part of the contract and included a provision that the work had to be paid off regardless of a sale within 18 months.
Once confident that her home stood on terra firma, Walton told the first two prospective buyers that the foundation work had been completed, but both had already purchased new homes. One, however, told Walton about a friend looking for a house. Walton contacted the friend, set up a showing and had an offer within a week. Eight weeks later, the buyer closed on the house, Walton paid off her contractor and put a down payment on a house in Iowa City, where she had accepted a new job to be closer to her boyfriend.
"I got pretty lucky," says Walton. "I could have sat on that house for a while — and knowing that I had lost two buyers would have killed me."
Read more: 7 Tactics for Preparing to Negotiate