I Negotiate Now
oo2. Due Diligence Diaries: Leaks, Loopholes, and Leverage
We’re a few weeks into contracting. Due diligence tasks are like stepping stones that form a windy path between us and Closing Day.
I’m thankful my husband enjoys and is skilled at coming through surveys, calling local officials and talking shop with water attorneys and tradesmen alike — There is a lot to uncover.
Surprise #1: The pond leaks.
Last weekend, we visited the property, cross-country skis on, as it was still covered in a thick blanket of snow. The visit was a lovely romp around, followed by an impromptu meet and greet with the neighbors. They all knew Cooper already from his phone calls (I roll my eyes and grin; somehow everyone always knows and loves my husband) and so they stopped their cars to say hello.
Between the phone calls and the meet and greet, neighbors are spillin’ tea.
Unsolicited, unbeknownst to one another: “You know the pond leaks, right?”
The thing is, the pond is covered in snow.
But this week, nature brought us some 65° days and a little bit of snow melt. Cooper enlisted a “pond guy” (he professionally installs aquaponic systems and recreational/irrigation ponds) to investigate.
We already knew the pond would be raising some issues to be solved down the road. The slope of the pond is dangerously steep and would need to be re-graded to protect humans and wildlife from going in and not being able to get out. Pond Guy was able to gather enough intel to put together a few $$$ estimates based on different likely scenarios: elk stomped holes all throughout the liner, the drainage pipe froze and shattered, etc.
Surprise #2: The greenhouses can’t be covered year-round.
Excuse me? Nothing will get between me and a tropical micro-paradise. Not Colorado winters, and definitely not some fine print. I will be an old woman picking lilikoi off the vine.
So first, we’ll need to address this detail that was left out of the property listing.
See, the property was built out for a cannabis operation. The permit the seller obtained doesn’t allow for a year-round greenhouse, which means they were covering and uncovering these greenhouses with brand new plastic every year because trying to roll up massive amounts of plastic to re-use would be extremely difficult. The monstrous expense and waste aside, following in their footsteps would obviously mean exposing every living thing inside the greenhouse (frames) to winter conditions each year. Not going to fly.
We explored whether we’d have to re-permit the temporary structures, which would also mean bringing the greenhouses up to International Building Code. $$$.
As luck would have it, the permitting won’t be an issue, but the structures might have to be reinforced in order to stand up to local wind and snow conditions.
Surprise #3: The ditch liner is a death trap for baby deer.
Remember that tea? This was the hottest. Claims of a dozen baby deer getting caught in the haphazardly laid ditch liner (the plastic fabric laid into the irrigation ditch so that less water seeps into the ground, creating a more efficient ditch irrigation system) — now that’s something to raise.
What It All Means for Us
Two of the biggest assets of the property, the pond and the greenhouses, are going to cost some serious dough to make them assets.
Luckily, this gives us some leverage in continued negotiations. Our “advisor” (who’s not our realtor, but that’s a post for another day) is ready to “go H.A.M.” to make sure we have the post-close liquidity to actually use the property for what we want. There’s no point in buying something if it doesn’t fit your needs, he says. He’s right of course, proving it’s been key for us to bring him in since we are already emotionally attached to our dream plot.
We’re a third of the way through contracting, flexing our negotiation muscles while starting to think about spring plans and our bigger vision. Fingers crossed, guns flexed.
TLDR;
The Pond Problem – Neighbors say: You know the pond leaks, right? An expert named Pond Guy revealed multiple potential issues, all with $$$ price tags.
Greenhouse Red Tape – The seller’s permit might not allow year-round coverage, meaning they replaced the plastic annually—not quite gonna fly with the tropical micro-paradise I have in mind.
Baby Deer Drama – The irrigation ditch liner has reportedly trapped a dozen baby deer. Say what?! Not exactly the kind of legacy we want to inherit.
The Negotiation Angle – Two of the property’s biggest assets come with big challenges. Fortunately, that gives us leverage—and with our advisor in our corner, we’re making sure we can actually use the land the way we want before sealing the deal.
