Damien,

1. Thanks for sharing a specific example. People can learn from your hard work without having to repeat the same experience.

2. If the defect to the foundation is structural then there are some ways to have a bit of fun and maybe produce a good deal.

Was the house listed with an agent? Did the seller disclose the foundation problem?

In any event the problem exists and if it is clear that there is no way around getting it fixed then the seller has the problem, not you. I would have provide some sort of formal notice (even in the offer or something else) which makes it clear that there is a defect. The idea being is all future buyers will need to be informed before a deal can be done or the seller can get sued for misrepresentation.

Once you help the seller understand the risks associated with their position they sometimes become more open to a price reduction or other way to make the deal work. Some of the time it takes a while before you can get them to come around. Repeat your offer (priced and structured correctly for the defect) every few weeks until they either sell or you have your offer accepted. If they do sell you could speak with the buyer to see what they plan to do about the defect.

3. My key is that everyone in the deal has to be dealing with full information when there is a known problem. Some are easier to fix than people realize. It can take a structural engineer to certify that the problem no longer exists. Disclosure can be your friend.

Keep hunting and remember to circle around to the prior prospects as dead ends sometimes turn into great deals when the seller changes their mind.

John Corey
www.CheleseaPrivateEquity.com/blog