Our house is almost complete. A tiny, three-story shoebox within Tokyo, and although prices have dropped, not cheap.
Numerous proposed completion dates come and gone, the first were not the fault of the city, not the developer. Finally, a concrete date of the end of August. Monday the 25th was to be the final inspection and we would close on Friday.
The move was set for the 1st. Lest Bata-chan’s temporary housing unit tire herself out, my wife is under strict instructions to not help with the move. A moving company contracted for the heavy work, her mother was scheduled to fly up from Taipei to help with the light things.
We’re now mostly living out of cardboard boxes, with only a few essentials left unpacked.
We ordered the curtains, arranged the loan, bought the insurance, set all the utilities, the internet, cable, phones, etc. etc. I must have called the agent a dozen times to confirm that we really could count on this date.
Oooooops. Work did not progress. We went on Monday and it’s not complete, and the interior wouldn’t be until the 3rd, they said. No, that won’t work. The exterior won’t be finished until the 10th.
They offered to work overtime to get the interior completed by the 31st, but I don’t want a rush job. We agreed to the 10th.
Now the gamble. They still wanted to close on the 29th. No thanks. I’d like to see our house finished first.
They offered to let us pay the extra options, about $13k worth anytime we wanted. They’ll pay for our rent and from the 1st until the house is completed and our other incurred expenses. No thanks. I’d like to see our house finished first.
Now things got serious. Like all small developers around the world, ours have a cash flow problem and his bank wants their money now. I look around, does this look like my problem?
I’m not a bad guy. I’ll work with them, and the first five months of delay was because of the city. I tell them I’ll pay for the land and 70% of the house. I’ll withhold 30% of the just the house.
He needs his money. They knock $9,100 off of the options. (Which were overpriced to begin with, but that’s a pit thread).
Thanks, but I’m still afraid. They ask if I don’t trust them. But it’s not a matter of trust. What if something were to happen to the developer? Get run over by a car?
I tell the real estate agent (who already has his 3%) that if they guarantee the completion, I’ll do it, knowing well real estate people only talk about trust when it’s someone else’s money.
They huddle and come back with an offer for the contractor to also guarantee the construction by the 10th. Some friends counsel yes. Some no. My US attorney says yes, but wants penalty clauses. My Japanese attorney vets the agreement and gives her blessing.
The gamble is that (1) there is a tiny chance that both the developer and the contractor both go under. Not likely in the 12 days, but still a chance and (2) without a strong financial incentive of a mega payment, they may delay or do substandard work.
From the beginning, I hired an independent inspector, who has provided an outside assurance. (It’s not a matter of trust; just always have someone who isn’t financially beheld to the other party.) He’ll do a final inspection with me.
Although the risk is small, it’s not zero. Worst case is that if the two parties fail, we have the work completed and pursue in court. I don’t see it, but you have to consider everything.
A shrewd negotiator or a fool? Will I save a lot of work or cause us a lot of grief? Is the gamble worthwhile? I guess we’ll find out in about two weeks.