Incomplete Repairs: Smart Solutions to a Common Closing Issue

How do you handle incomplete repairs at closing?

After all the negotiating back and forth, you finally agree on the terms and conditions for closing. But as is pretty standard with closings, something unexpected happens and repairs that should have been completed by closing won’t be ready in time. This can be an emotional trigger for the buyer, who is already naturally nervous about embarking on such a large purchase. The seller will no longer be vested in the business and doesn’t want another last-minute headache to handle on his way out the door. How do you resolve this issue in a way that is mutually beneficial?

The buyer should obtain 2-3 estimates to do the work that is incomplete. An escrow agreement should be prepared, providing that two times the average estimated cost is held in escrow from the purchase proceeds. That amount can only be distributed to the seller when both the buyer and seller agree in writing that the repairs have been satisfactorily completed.

Another alternative is to provide the buyer a credit (reduction in purchase price) sufficient for the buyer to hire someone to complete the work. Some buyers prefer to control the work or do it themselves to save some money, “pocketing” the value of the difference between the contractor’s price and sweat equity. They may also want to be assured the repair will be quality work by hiring a trusted repair contractor. Whether the buyer chooses to complete the repairs himself or hire out the work, he is still entitled to the estimated costs for a professional service. Unlike the first alternative where extra money is held in escrow until the repairs are complete, a credit lets you walk away from closing with the entire proceeds you expected.

Both solutions work equally well. It is a matter of what is most comfortable or convenient for the buyer and seller. Although this situation is not ideal, neither is it unusual. The attorneys of both parties can determine which solution is best and set up the logistics for making it happen.

Having “the talk” with your parents

People are living longer. While medical technology can keep our bodies mechanically working longer than ever, the later parts of life are often accompanied by dimensia, Alzheimer’s or other memory issues.

As health declines, there is a need for caregivers to understand their loved one’s health care wishes. The lack of clear instructions can lead to family fights, anxiety and feelings of guilt. Most of us dread this topic as much as we did “the talk” when we were teenagers. But, like that discussion, it is important to have this talk. (Hey, enjoy the opportunity to return the experience!) How can you start the conversation with your loved ones?

Next time you stop over to see Mom, bring up an article you read and start an unwanted but necessary discussion. You could also talk about someone you know who is facing a healthcare crisis in the family or a compelling case in the media. Ask questions to learn what Mom would want in similar circumstances. Does Mom fear that she will be given care and treatments she doesn’t want? Does she fear she won’t get enough care because no one is available to provide daily assistance or her insurance and financial resources are limited? Does she have explicit instructions or just general guidelines for her caregivers?

What is her tolerance for pain? If she had the choice between maximum pain relief that made her sleep or to tolerate some pain but stay awake and alert to visit with family and friends, which would she prefer? If she had a fatal car accident, and there was nothing the doctors could do, would she want to be taken off life support right away or kept on machines until out of town immediately family could visit and say good bye?

Exploring some issues faced by other family members friends or people in the media can reveal a lot about her needs and values, giving you the insight you’ll need to make decisions in the most challenging circumstances. After you have the discussion, encourage your Mother to memorialize her instructions in a health care proxy and living will so her loved ones can carry out her wishes. These documents are usually only a few hundred dollars and are preventative medicine against the thousands of dollars that are paid in legal proceedings when the documents are not in place and courts have to get involved.

Final wishes can come true

Gail Rubin, the doyenne of death, has a website that explores the rituals we use to celebrate and honor the lives of our loved ones. There are so many ways families approach the “final goodbye” with an opportunity to reflect, remember and celebrate. She promotes funeral pre-planning to alleviate much of the financial and emotional stress that accompanies the death of a loved one.

Estate planning complements this process. There is so much stress when a family crisis arises, so much emotion is brought out and often, family fighting. Children revert to their childhood roles and rivalries. It is human nature.

What can you do to prevent a difficult situation? The answer is simple. You can help alleviate family controversy by telling your family what you would want. They all want to your honor final wishes – the problem is that they often disagree about what you would have wanted. People read their own values into the situation. They also interpret what you have said in the past in different ways. Help them with a clear road map.

You can give your family peace in knowing that they carried out your final wishes. That is the best gift you can give them because they want to know you were happy. You give them a gift by identifying your wishes – a gift that is invaluable and irreplaceable. You give them peace – they don’t have to guess – they know for sure. We all want to give our best to our loved ones. So help them do that by telling them your wishes!

So many people believe their loved ones will know what they want, however, studies show that it is not so clear. Life is more complicated and situations are more complex than ever before. Should you be buried in a family plot with your parents? What if you were married twice. Which husband should you be buried with? If you are cremated, what should happen to the ashes? Should they be buried? Scattered? Kept in an urn? Who gets them? These can be difficult decisions, especially in the face of overwhelming grief. Your family wants you to be at peace in your final rest.

There are several legal documents that can help you do this – a living will, a health care proxy and an appointment of agent for disposition of remains. These documents generally are less than $500 to prepare. What is the price of family peace? If you have not prepared these documents, I encourage you to take the time. It will be a gift that lives forever.

Have the entrepreneurial bug?

Have you been considering launching a new business? You probably are wondering if this is a good time to take the leap. Business ownership is a lifestyle choice. Are you needing to change your lifestyle to achieve your personal or professional goals? People start businesses at all phases of life. According to Global Entrepreneurship Monitor, new business were started or operated by:

  • 6% of all adults 18-24 years
  • 18% of all adults 25-54 years
  • 6% of all adults 55-64 years

More businesses are started by men, but the gap is decreasing. While only 80% of the U.S. entrepreneurs are women, they make up the majority of new entrepreneurs in the age 55-64 group. If you offer a service to startup businesses, you should focus on this target market. Common reasons women launch a business at this phase of life are second careers after raising a family and a desire to get out of the rat race in favor of more control over career, quality of life and a retirement income. The competing family and financial demands are less in their late 50’s and early 60’s. Confidence in entrepreneurial ability is greater for women at this age as well.

Your first step towards entrepreneurship should be to prepare a business plan. This will guide you as you launch the new business and help provide targets and benchmarks to measure progress. Consulting with a business attorney can help you identify steps you will need to take for regulatory compliance, potential risks and mitigation options, and alternatives for business structure. Armed with this information, you can create a realistic business plan with appropriate costs and timelines.