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How Doing the Right Thing Will Make You Money

By Mark Ferguson – Feb 1, 2014 at 12:44PM

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Ignore the cost and spend some money to make it right.

Source: Jeffrey Zeldman

In one of my previous articles I talked about how a good reputation gets me more real estate deals.

This last week, I had a what appeared to be a very bad thing happen on one of the houses I am flipping.  I had two choices that I could legally go with; ignore the problem or spend some money to make it right.  I chose to make it right and it has had multiple benefits.

The Problem With The Fix and Flip
We remodeled this home before we sold it; new paint, carpet, doors, floor coverings, appliances and more.  Everything went according to schedule as far as repairs, listing and selling the home.  Then about three days after closing, I received an email from the selling agent telling me the sewer line had backed up and the line needed replaced! Uh oh...  The home was built in the 1960′s and we never suspected a problem as our contractors and cleaners never had any issues.

The good news was the entire line did not need replaced, just about 15 feet of it.  The new buyers were a couple who had little money and they had to take out a loan to pay the $6,000 needed to make the repairs. The buyers' agent did not want any part of this and told me to contact the buyers directly if I wanted to. I had a choice to make; ignore the problem since the home was sold and we had no knowledge of the problem or try to help out the buyers.

I chose to help out the buyers for a couple reasons. The first reason is we sold market the home as being remodeled and in great shape. Even though it was older I hate seeing problems on houses we recently sell. The second reason is we sell a lot of homes and someone complaining about how we do business could hurt us in the long run.

The Solution
I decided to offer the buyers $2,000.  

It was not the full amount, but something to help them deal with this unexpected cost. The buyers came back and said they would like to split the cost and would like $3,000. I agreed and I personally took a check to the buyer.

The Surprise
I did not know what to expect when I took the check to the buyer.  

He could have been irate and the situation extremely ugly. It turns out he was extremely grateful that I was willing to do anything. He said he had contacted a lawyer and was thinking about filing a lawsuit when I made the offer to him and he quickly dismissed the idea of suing us. He then told me his son was going to move to the area and he was going to give his son our name when he was ready to buy a house.

Not only did we avoid a lawsuit, which would be costly whether we won or now. We also made a client for life and will probably get many referrals from him.

This article is Copyright 2014 BiggerPockets, Inc. and was resyndicated by

Mark is Real Estate Broker and investor in Greeley, Colorado. Mark invests in long-term SFR rental homes and also does 8-15 fix and flips a year. Mark started a blog this year that focuses on investing in long term single family rentals.

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