the-abcs-of-real-estate-investing-ken LifeFeeling

But as binding as the agreement is, with the right language built in you can walk away,
extend your dates, or adjust your offer based on your findings during due diligence. We
have rescinded our offers on a few properties for just cause. In fact there was one property
that we pursued through the signing of the purchase and sale agreement. During the due
diligence investigation process, the structural engineer on our team found that the building
was built on what they term in Arizona “expansive soil.” What that means is that the soil
expands and contracts more than normal and can cause foundation problems. Knowing that,
we looked further and found a twenty-foot hairline crack in the pool, small foundation
cracks, and exterior wall separations. This was indicative of bigger problems that could be
incredibly costly and we felt the risk was too great, so we sent a letter to the seller stating
that we were rescinding our purchase offer in accordance with the terms of the agreement.
CHAPTER EIGHT ACTION STEPS
• Visit my Web site (www.mccompanies.com) and print out several sample letters of
intent and get familiar with the pro visions and language.
• Do the same with purchase and sale agreements.
• Continue to seek out property prospects, calculate valuation, and when you see a deal
with numbers that work, generate a real letter of intent or in some states the purchase and
sale agreement.