3 Ways to Prevent a Seller from Leaving a Messy House


			
			

It’s pretty easy to understand the anger and exhaustion a buyer faces when they open the door to their new home only to find the seller has left a messy house behind.

Three ways to help make sure your seller doesn't leave a messy house when they move out.

If the state of cleanliness matters to you, then it is important that you control for this element yourself – don’t leave it to someone else to meet your standards.

Here are 3 ways a REALTOR® can really help you address this messy house issue before you even get to your possession date:

1. Create a “clean possession” holdback

If done right, this is the simplest solution, usable in situations where the place looks a little messy, and you just aren’t all that confident the Seller is going to get it all cleaned out before they leave.

Build a clause into your contract that requires the Seller’s notary or lawyer to hold back an agreed upon amount until “clean possession” is proven.

What is a holdback?

A holdback is a useful tool to help ensure the Seller cleans out their messy house. The Seller gets the money on completion if they clean the house to the agreed upon standard. The Buyer gets the money if the house is not in the agreed upon “clean possession” state on possession.

Two things are important here:

  • picking the right amount for the holdback
  • being specific about what “clean possession” means

When considering how much to put aside for the holdback, take into account:

  • whether you can clean up any messes you find yourself relatively easily
  • if you will need to hire professional cleaners to help you
  • will you need to stay in a hotel?
  • whether your possessions will need to go into storage, or “sit on the truck”

Use objective criteria to determine if “clean possession” has been achieved. It can’t just be “when I’m happy”, because that is an unknowable and unprovable standard.

Give the Seller specific tests to meet, so you don’t spend even more money having your notary public or lawyer argue about whether “clean possession” has been achieved.

Pick a specific date when the holdback should be dealt with.

Having the Seller give you receipts from an agreed upon professional cleaning service before the Completion Date is the most common way to do this.

Identify any specific issues in your “clean possession” clause. Saying “don’t leave a messy house” isn’t sufficient. For example, “the Seller must hire a professional moving company to clear out the shed before the completion date, and provide the Buyer with paid receipts for same”.

Releasing the Holdback

On the Possession Date (or whatever other date you chose), look at the objective criteria you set – were the terms met?

If the terms were met, the holdback can be released to the Seller.

The holdback is forfeited to the Buyer if the terms are not met.

2. Build a “day-before completion walkthrough” into your contract

This option is for when you really aren’t confident that the Seller is going to be able to clear everything out by the Possession Date. This is triggered by a messier than normal house. Buyers of newly built homes also use this tool as a way to make sure repairs are finished before they move in.

In this situation, your Realtor will build a clause into your contract that:

  • lets you go to the home the day before completion at an agreed-upon time, and do a walkthrough
  • requires a brief report to be created by your Realtor after the walkthrough, either stating that the issues have been resolved, or listing any items that might still need to be dealt with (and a deadline for fixing these items)
  • gives an amount to be held back from the sales proceeds until the deficiency list deadline. If the items on the deficiency list are not done by the deadline, the holdback is forfeited to the Buyer. If they are done, the holdback is released to the Seller.

The advantage to this way of dealing with a messy house is that you are leaving the control in the Seller’s hands. It is completely up to them whether they get their holdback funds or not.

3. Adjust the purchase price to take cleaning a messy house into account

This option works best in extreme cases. If the Seller is a hoarder, you know they are not going to be able to clean out their messy house before they leave. Mental or physical illnesses and addictions can all lead a Seller to just simply not being able to manage their home.

This isn’t for the faint of heart!

This option needs a lot of planning, and it isn’t for the faint of heart. You do this only if you are up for what might amount to an archeological dig, where you could find surprises you didn’t plan for.

You need to be willing to generate a small army of professional helpers to make this happen. It’s also extremely important to give yourself a lot of time before you expect to move into the home.

Essentially, you buy the house with all of the “stuff” intact. The Seller removes any personal items such as photographs or jewellery they wish to keep, but everything else stays. You are buying the messy house “junk in”.

There are three basic steps:

  • build extensive inspection clauses into you contract
  • have experts help you determine the type of issues you will be facing, and develop a budget for fixing those problems
  • reduce your offer by the amount of that budget.

You carefully inspect the property, come up with a remediation plan and budget, and then lower your offer by the amount you believe it will cost you to remediate the home. If you can provide estimates for the work required to your Seller, that will aid in your ask to lower the purchase price.

First: build inspection clauses into your contract

You normally inspect a potential purchase to help you identify potential problems. However, in this case, you already know there are problems (although you might not know the extent of the problems). So these inspections are done to determine the nature and extent of the clean-up you will have to do when you get possession.

Depending on the extent of the messy house, have your Realtor add the following “subject to inspection” clauses into your contract:

  • a home inspector who is a member of the Home Inspectors Association of BC
  • a professional declutterer
  • an industrial cleaning service
  • an inspection by a mould specialist (or biological waste specialist, if there are food, urine or feces issues)
  • a contractor (to help deal with removing damaged drywall, repainting or otherwise remediating issues)

The language in your contract should allow for these inspections, but also any subsequent inspections that come up out of these inspections. That way, if your declutterer finds unhappy surprises in their walk-through that require additional inspection, you have the ability to investigate further.

Have accredited professionals do these inspections whenever possible. Then you know you are getting the best possible review, and a reliable report.

Do not make these estimates yourself – you are extremely unlikely to get the amount of work and time right, and then you will only have yourself to blame.

Next: get thorough inspections, and quotes

Now you need to identify the extent of your potential problem.

Make sure you are clear with your professionals about the scope of their inspection. Are they going to look at the inside of the fireplace, or just the hearth? What is extent of their biohazards testing? What are they excluding from their services, and does that exclusion matter to you?

For example:

Have the declutterer do a run-through of the house and then give you a very conservative report that tells you:

  • whether anything in the house is worth saving
  • if you might be able to sell some of the items
  • whether any of the items might be donate-able to a shelter or charity
  • what will they need to empty the house (one dumpster? two? hiring 5 labourers?)
  • how long it will take
  • what other services will be needed to empty the home (biological waste specialists? mould inspectors or specialists?)
  • what will it cost to fix these issues?

By “very conservative”, we mean “tell you the worst possible scenario they can imagine”. Then you can budget accordingly.

When planning your budget, include the cost for housing and storage while the home is being cleaned or remediated.

Will you need to stay in a hotel while the cleaners are working? Do you have pets that will need to be boarded? What will it cost you to store your possessions while you wait?

Put together these estimates and add them to the cost of the inspections and the workers.

Third: adjust the purchase price

Take the estimates for emptying, cleaning and repairing, and add them all up. Deduct that amount from the offer that you would normally have made, had the house been in good shape.

If the Seller balks at the price, show them the estimates for clean up and explain how you arrived at your offer number. For example, you might say something like: “I am willing to pay you $500,000 for this property. My cleaning estimates indicate that it will cost me $50,000 to get this property to a usable state. Either you can do it, and prove that you have done it, or I can do it. If I am doing it, then my offer will take the cost for that work into account.”

If you are going to be doing the work to clean up the Seller’s messy house, you should receive a reasonable compensation for that. Your Realtor will be a valuable asset to you here.

Final words on messy houses

If you are okay dealing with your new home being in any old state when you move in, then these issues won’t be a concern for you.

However, if the state of the home you are buying really matters, then you should control for that. You can’t expect a Seller to read your mind, or know your standard of cleanliness, unless you specify it in your contract. Decide what your standard of cleanliness or repair is, and then think about whether you trust the Seller to meet that standard.

If you don’t want to have to fight with the Seller afterwards about whether they have left a messy house, (and you certainly can fight with them, if they have not given you what you bargained for), then you need to control for this issue at the contract-drafting stage.

A great Realtor will help you negotiate these issues before you get to your Possession Date.

Contact us if you have questions about how to draft clauses into your contracts that help you deal with these issues.

Want some other reading about buying a home?


			
			
			December 21, 2019 2:25 pm 
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