This afternoon we successfully sold the house we’d owned for about 18months as a rental, making it our first “flip.”
- We bought the house in June, 2010: $87,000
- At that time, we invested $2,500 in repairs in preparation for occupation by tenants.
- In November, 2011, the tenants moved out and we spent another $2,500 rehabbing the house for sale (paint, tiling, landscaping, etc.).
- We just sold the house for $115,000, minus closing costs that came to ~$107k. Not counting gasoline/mileage, labor and utilities, we’re looking at about $15k in profit.
Of course, there’s always more drama than I’d care for in these transactions. When we put this house on the market, we immediately got an offer. That offer fell through, but before it hit the ground we received a cash offer with an earlier closing date. SCORE! Today was that date.
A few days ago, Mr. H was out at the house addressing the few items highlighted by the inspection and included as “must fix” in the contract. Note: that list included repairing the AC that had nothing wrong with it, the inspector didn’t know how to run it. That list also included replacing the dishwasher that didn’t work properly because the WATER WASN’T TURNED ON. We couldn’t convince the buyer, so we replaced the dishwasher. Anyone want to buy a perfectly good dishwasher that works fine (as long as there’s running water)? One item that was on the inspector’s list, but NOT on the contract, was the “missing” cover for the water heater.
While Mr. H was industriously working away, addressing the items on the contract, the new owners stopped by for a walk through. They complained about the appearance of a smoke alarm and badgered Mr. H into agreeing to replace it, which he did. Today, as we arrived at the Title office, they greeted us with “we noticed another screen that needs to be repaired. Oh, and the door to the water heater is missing.” An interesting conversation ensued, which I mostly ignored. After a few minutes, it was clear that we would replace the screen but we didn’t have the missing cover to the water heater. Mr. H was agreeing to repair the latch that was there “as long as the cost was $5 or $10.” I was NOT liking having an open item like this, or the trend of “fix this, fix that.” We’d met the terms of the contract, they were not our tenants. Ahem.
So, I stepped in and expressed my thoughts on the situation. The owner-to-be threatened to walk away, to which I responded, “Fine. You do realize we keep your $1,100 earnest money and deposit, right?” I think our agent might have wanted to intervene, but wasn’t sure which way to go with the situations. On both sides of the equation, you have to ask, “Really? You’d walk away from this deal over a repair that would cost less than $20?” Our agent did offer $20 to stop the discussion. I walked away after making sure the buyer was clear on my position. In the end, he and Mr. H worked out that Mr. H would stop by this weekend to do the repair. I wouldn’t have (half a day, 30 miles round trip) but at least we can move on now. Presumably. It’s not hard for me to imagine the new owner hitting Mr. H up with, “Hey, I noticed **insert minor flaw here**, can you fix this?” Then again, maybe not.
It’s not how I imagined the closing, but at least it’s behind us and we can move on.