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I was going to start rehabbing another house recently, when I got a call from an out of state young person asking to fly over to see it. I sent as many photos as I could, to let the person see it was not for the uninitiated in the constructors on field to understand the complexity of the project. This person flew in any way, and was shown the house. I also showed this prospective Buyer another house that I was finishing the rehab on, here in Fort Worth.
This person liked the Fort Worth house so much, that she wanted to purchase it right away, but …… in owner Finance with a good sized down payment. Talks ensued, but no contract was signed as she kept shuttling between straight owner-finance, and straight leasing with an Option to buy at the end of a 12 month to an 18-month period. I know Options in real estate in Texas are an executery contract, meaning an ongoing one, till they are executed, and have a duration of 6 months max.
She kept insisting on sending the down payment to me, and I kept refusing till the proper contract was signed depending on the option she chose to take up. In the meantime her girlfriend decided the finished kitchen countertops and backsplash were not to her liking, so wanted to change it to granite ones. I explained to the Buyer, it would incur a lot of cost as I had already spent money in materials and labor to finish the kitchen. She kept pestering me, so I got quotes from different vendors. Then he selection process took long. Then she wanted to know the cost of building a new driveway with a car port, or garage. All this took a lot from my work schedule, and I should have been more firm, but a lesson learned here.
She wired money over for the granite countertops, and I hired people to demo the already installed new backspash, plywood, stone counters, dumping fees, and then re-installation. Something happened in the past couple of weeks, when she decided what route she wanted to take in buying. When informed about the closing costs when buying real estate, and maybe the involvement of an RMLO, as I am doing 2 more owner-finance deals, she today called me asking for the granite money back! Also said she was buying another house and was in town agin to go through a closing. She never informed me till Friday she had changed her mind.
Before I am lambasted over not having had her sign some sort of paperwork, I want to know if I should send her a mutual releases of Liability form, or a general one.
She costed me material, labour, days of work lost, re-assignment of workers to finish up on work they were not assigned to do. Also had to work 7 days a week to meet scheduled deadline. She had decided to sell her cars and move to Texas by the 15th. Everything was verbal, the granite is already installed, new backsplash is already done, and related work also completed. What is my recourse? I am NOT going to return all of the granite money for being mislead, and her volatility, my lost time, effort, labour, material cost, mental anguish, some non-material costs that are non-quantifiable.
It’s too late. The time to get the release of liability was BEFORE you spent her money on granite countertops for a house she did not even have a contract on.
Lessons learned!
Even if she had a contract, it would be better to get the countertops installed AFTER closing because closing sometimes fall apart at the last minute.
Regarding making improvements after the closing is concerned, that is what I kept telling the prospective buyer. She would not have it any other way.
Lesson learned:
1. LOI
2. Improvements before should have a liability waiver attached which also spells out that no money used in an improvement made at the buyers request will be refundable irrespective of the buyer buying, or not. Time, labor, material, money, and other non-quantifiable factors will not make it possible to do so.
3. Just like a change order one has to sign with a contractor in the middle of a project, this will work the same way.
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