Buyer Wants Copies Of All Receipts
Hi!
We are closing on a house we extensively rehabbed over the past 4 months Monday. The buyer called today and said his attorney wants us to bring a copy of all the receipts for everything we have done on the house since June.
I asked him why he needed them and he says he's not sure but that he would like the copies too for 'peace of mind'. I can't imagine that they would actually need them for anything and i'm not planning to copy everything for them.
I personally suspect he just is really curious about how much we are making and he is better off not knowing. He has likely gone down and pulled the old deed to see what we bought it for. He has signed the contract and is buying the house. I can see no good from giving him the information. I was considering typing up a list of the contractors that did each job. But he really already has everything he needs. If something breaks down at any time over the next couple years while it's under it's warranty, he can call me.
What would you do??
Thank you for any thoughts on this.
dkdrake
I recently rehabbed a 3 unit apartment and I sold it to a very picky buyer. To protect myself in the future, I sold it with a "As is, Where is" clause in the contract. and that the buyer has right of a home inspection. This way you are not responsible for any problems that may arise in the future. I wouldn't give any receipts because that would add further complications. Just ask the buyer if he's interested in the house 'As is" condition and if he's not, look for another buyer. You own the house! I would maybe provide warranty information you may have on big ticket items like the roof, bolier etc.
I am curious why anybody would want to eliminate 99.9% of the potential market by offering their recently rehabed property As-Is?
The weird thing is, he has had an inspection, an appraisal and has been in and out of the house since we signed the contract on it in August before the last 25% of the work was even done. So he has had plenty of time to see what he is getting. So in that sense, it is As Is.
We have a detailed contract that said exactly what he wanted for me to do before he purchases the house. He is very pleased with everything but just wants to know what I'm making on the deal is all I can figure. Even giving him the receipts would give him no idea how much I spent since most of the cost was labor.
I just want to be sure someone doesn't know of another reason he might possibly need the receipts that I haven't thought of. For his "Peace of mind" isn't really a reason to me.
The only other reason I would suspect is that the lender wants to see what was done. My wifes company requires receipts on a rehab home if they aren't seasoned more than 9 to 12 months. They want to make sure that the investor isn't flipping the property with basic cosmetics.
If the work was done, then I see no reason why the receipts shouldn't be produced.
Then if you give a home warranty to your buyers through XYZ company, you should have no problem.
John (LV)
Hey,
I don't see why this is such a big deal...produce the receipts. If you did most of the work yourself, then instead of receipts put together a spreadsheet of work done showing materials, material costs and TIME (in man-hours).
I was in a similar situation with a difficult buyer a few months ago.
, so out of spite I didn't want to give him letters and a reciept. I'd caved into his every demand and I was drawing the line here. It had gotten personal.
He wanted the entire roof replaced, so I grudgingly obliged. Upon completion, he wanted a copy of the reciept, a letter from the roofer, and a letter from me saying that the roof had been replaced.
He said to me, "How do I know the work has been done?"
"Well," I said. "For starters, try opening your eyes. The old roof was white, the new roof is black. Second, you poked around each day the roofers were working, watching their progress. And finally, when it was done, you spoke directly with the roofer, told him the roof looked good, and got his number to give to a friend who needed roof work done."
I told him that was proof enough. Mind you, this guy had been a monumental pain in my ass the entire way through. And this was just the last straw for me. Things had gotten nasty throughout the buying process (numerous times he threatened to back out and called me, my attorney and my realtor "a nest of snakes"
Thankfully, my attorney stepped in and was the voice of reason.
He told me to swallow my pride and give him what he wants.
Sure it felt unreasonable, but I knew it would be over with in a few days. Plus, if this guy walked and I lost the sale over something as stupid as roof receipts, I knew I'd feel like a real jackass when the dust settled.
Moral of the story: Just give him the receipts.
If you don't, in the buyer's eyes, it probably looks like you're trying to hide something.
Take care.
[addsig]
make it easy on yourself give him the reciepts. make your sell and cash your check. it will bring a smile to your face......and then under your breath say "jerk" and laugh all the way from the bank.....km
I rehab my properties and then sell them "as is". Inspections do not turn up anything, but they are not able to come after me for things that crop up later.
ItzMe
P.S. I sell without a realtor at full retail
If your purchase contract specifies certain repairs to be completed as a condition of the sale, then it is a very reasonable request from the attorney to prove that the required work was done.
I went through the same thing with a property I sold. The buyer's home inspection report detailed certain items that may need attention. The buyer asked for some of these items to either be repaired or for me to give a repair credit at settlement. I did the requested repairs and presented copies of my paid invoices at settlement.
No problem that I can see. Don't get too paranoid about the buyer's or lawyer's motivation.
dkdrakes situation and the examples given here are totally different. He isn't in the situation of a counter offer with fixes to be made.
No reciepts are required to be given, your buyer had the house inspected, the inspection report and the appraisal are his reciepts that he is getting what he is paying for.
Since I do cost plus a set price on new construction, my books are opened....however on rehabs / remodel.....its a different story.
I have learned from experience (bad) not to deal with such people. They typically want something for nothing, they nit pick over the silliest items and are great at wasting your time and money.
If an inspection and appraisal report has been done as you stated, I would tell that if they dont buy that then there is obviously a "trust" issue.
If they dont trust me, the inspector or an appraiser then I would tell them to hit the road.
You can call it pride if you wish but Im sure there are plenty of investors / rehabbers that have learned to recognize such anal people are not worth dealing with.
To me this person appears to be unreasonable and is trying to ease his mind as to weather or not he got a good deal.
NC_Yank
Is it possible that the lawyer wants to see if everyone has been paid in order to assure that no recent mechanics liens show up?
If your payments are in a database you could send him the list of repairs and ask which receipts he wants to see. Maybe just the big ticket items would be enough.
cstanley has made the same point that I thought of. Many people that buy properties will have people do work and then get paid at the close. I was in that sdituation in DEC 2002. I had my HI Compnay due all the work and the costs were paid at closing. I requested a copy of the prehud and my company was not listed on the payoff side. In this instance it was a mistake on the title company's fault but without a lien on the property I would have had no legal standing to be paid by law on the HUD. I have since put liens on the properties when I run into this situation.
Seeing the receipts is really not a big deal unless you have something to hide.
Lori
[addsig]
I'm wondering if he wants the receipts so that HE can try to claim capital improvements on his taxes (which require receipts)? Just a thought!
-A :-?
Probably not. I would suspect that the loan is probably FHA/VA. If there is 90 - 179 days seasoning they require copies of receipts, pictures if available, and two appraisals.
Everything went fine at the closing. Actually it got kinda weird but I would guess they almost always do in one way or another.
We were going to close Monday and the lender's paperwork was not right so they had to overnight corrections. Meanwhile the buyer had to go 500 miles away get his furniture packed and get his wife and child Tuesday Morning.
He paid the downpayment before he left and did everything but sign the final paperwork.
So we went in and signed everything yesterday . The buyer got back last night and signed this morning.
He never mentioned the reciepts again and the lawyer didn't either.
I did go through all the reciepts to see if there was anything he might need. I created a little excel program that listed each item, the vendor and their phone number. I even gave him all the utilities and their phone numbers.
So maybe that is good enough. Or maybe he just realized that the attorney didn't enforce our giving up the reciepts so what recourse did he have.
I was there today when they were moving in. They were happy and everything was great!
That was my first house!!!
WHEW!
:-D
Congrats on your first deal!
In the future, since you overlooked the entire operation, you can be classified as a "general contractor." As a general contractor, you sub-contract the work to others (roofers, plumbers, dry-wallers, painters, etc.). If another homebuyer requests reciepts for seasoning issues, make your itemized reciept for them with your markups (this will reduce the shown profit you made on selling the house). Of course, you need to speak to an accountant before you do this; the IRS may want you to pay taxes on these "profits."[ Edited by torontoinvestor on Date 11/05/2004 ]