The house was listed at 218k, we were able to get it under contract at $203,029 which we felt was super awesome. However, there was no inspection contingency with this property. Meaning that we could do any inspection we wanted but we would not be able to get our earnest money back in the event we decided to back away from the house. (Earnest money is held by the title company and used towards your downpayment-usually 1-2% of the house price- but this can be lost if you walk away from the property.)
The bank sent us a purchase and sale agreement and we had 48 hours to sign it before the house would go back to auction and before we would have to turn in the earnest money. So… we used our time wisely and had the house inspected by my Dad and also made sure the septic tank was running smoothly.
When you buy a house, you want to know everything you possibly can about it before you purchase it. So inspections are critical. 48 hours is not enough time to get everything done, but we wanted to make sure the big stuff was good. And as it turns out, the septic tank was shot. Needing full replacement. After talking with several septic companies we found out that costs were anywhere from 8-15k and that doesn’t include redoing the lawn that was just torn out! You can’t get a full quote until the soil is tested and the system is designed, so this price range is all we had to go off of.
When you don’t have a functioning sewer or septic at a property… you cannot get financing. So, we went back to the bank with an all cash offer of $165,000 and they said no. We decided that this news of the septic put us over our comfort level with this house and we decided to back out. Luckily we did this all within the 48 hours and are now free and clear of this money pit! We are bummed because we are anxious to get a property and get it rented out, but we are also going to make sure that we make sound investments.
And icing on the cake is that the bank re-listed the house at 218k and didn’t disclose that the septic is not functioning. I feel like posting a sign at the property for the next interested buyers.
And now, the search continues!