bry's-gal Posted October 17, 2011 Share Posted October 17, 2011 We put a contract on a house. During the inspection, several major issues were discovered that includes termites, a gas leak, mold, water infiltrating into the house in at least 3 hours, urine soaked carpet, a deck that is not built to code and siding that has been part of a class action law suit and is deteriorating. The siding is not covered under its warranty because it has been improperly installed. We spoke to our insurance company about this particular siding to see if it would be covered at all- it would not. We asked the buyers to fix all of these serious issues. They are only willing to fix the termites. We cancelled the contract and asked for our earnest money back since we do not agree to what they are willing to repair. They are refusing us our earnest money. We really don't want to go to abbartation or court if we don't have to. Any advice? Quote Link to comment Share on other sites More sharing options...
Kile529 Posted October 17, 2011 Share Posted October 17, 2011 Are you working with a realtor yourself? That would be an issue for your realtor's broker to handle before headed to court. As long as your contract was written in a way that allowed conditions per satisfactory inspection, etc, then you'll get your money back. If you aren't working with a realtor, odds are all you will need is a lawyer to make a phone call for you and your check will be in the mail. I hope this helps....I was a realtor for 5 years and came across MANY slimy agents.....but there are honest ones out there - hopefully this will clear up quickly for you. ;) Quote Link to comment Share on other sites More sharing options...
bry's-gal Posted October 17, 2011 Author Share Posted October 17, 2011 We are working with a realtor but we have serious doubts as to her knowledge and capabilities. At the end of this deal, we will be looking for a new one. Quote Link to comment Share on other sites More sharing options...
QueenCat Posted October 17, 2011 Share Posted October 17, 2011 Why do the sellers have your escrow money? That is normally kept by the broker. Quote Link to comment Share on other sites More sharing options...
bry's-gal Posted October 17, 2011 Author Share Posted October 17, 2011 I believe that the realtor of the sellers has the earnest money. They sellers are not signing the form to release us from the contract and to get our earnest money back. They want us to write the document so that they get the earnest money and we won't. Quote Link to comment Share on other sites More sharing options...
In The Great White North Posted October 17, 2011 Share Posted October 17, 2011 What did your original contract say? What was the specified contingency for the inspection? Did it say"an inspection," a "satisfactory inspection," an "inspection revealing less than $5000 of needed repairs," etc? Was the house advertised "as is?" Quote Link to comment Share on other sites More sharing options...
wapiti Posted October 17, 2011 Share Posted October 17, 2011 At this point, you need a real estate lawyer. Hopefully, all they'll need to do is write a threatening letter, which shouldn't be very expensive. Typically, the issue would be whether the defects are "material" to the transaction, but you need to look at the particular wording of your contract, probably in the area of the inspection clause. DH and I are lawyers, but we still always use a real estate attorney when we buy a house (for a typical closing, it's usually only around $500). Many realtor-prepared offer contracts include a 3-day window for attorney review of the contract. When such a clause isn't included, we'd write it in. Quote Link to comment Share on other sites More sharing options...
crazyforlatin Posted October 17, 2011 Share Posted October 17, 2011 What kind of contingencies are contained in the contract? Did you waive all contingencies? The deposit should be in escrow under normal circumstances and not held by the realtor, unless both parties decided not to go with an escrow office. However even in escrow the owners would still have to sign a document for the release of the deposit. Quote Link to comment Share on other sites More sharing options...
crazyforlatin Posted October 17, 2011 Share Posted October 17, 2011 Even with an as-is sale, it does not mean the owners have no obligation to disclose defects. Quote Link to comment Share on other sites More sharing options...
In The Great White North Posted October 17, 2011 Share Posted October 17, 2011 The obligation to disclose defects varies by state, and normally only includes things you know about (not things you suspect) and doesn't include things like urine on the carpet at all. Typically, it asks things like"Is there lead paint on the premises?" Since the owners have never tested for lead paint, they simply check "Unknown." They're often not helpful at all. Quote Link to comment Share on other sites More sharing options...
Brilliant Posted October 17, 2011 Share Posted October 17, 2011 Your seller is a jerk. If there was an inspection contingency on the contract, then he's required to give you the earnest money back. We had to file in small claims for a buyer who wouldn't close on a sale AFTER all contingencies (including inspection) had cleared. Per the contract, we were to get the earnest money in that case. The escrow company's policy was to release the earnest money only if they had a signature - they didn't care what the contract said. So we went to court. The beautiful thing was that there was a tiny blurb in the contract about a penalty for withholding the earnest money without cause. The would-be buyer lost the earnest money AND the judge made him write us a check for court costs and the penalty. Check your contract for that - it might be enough to get your seller to give up the earnest money, if he knows he's risking penalties. Quote Link to comment Share on other sites More sharing options...
Guest IdahoMtnMom Posted October 17, 2011 Share Posted October 17, 2011 Escrow depends on the State... in some cases it is held by the broker, others an escrow company, and yet others by the Title company. In private deals, earnest money can be held by a real estate attorney. It depends on the contract. You should have ha dan inspection contingency with a specified amount of time. If the inspection was done in that time frame, you get your money back. If it was after that time frame, you don't. If the box for inspection contingency was NOT checked, you don't get your money back. The contract is key Quote Link to comment Share on other sites More sharing options...
ChristineW Posted October 17, 2011 Share Posted October 17, 2011 Escrow depends on the State... in some cases it is held by the broker, others an escrow company, and yet others by the Title company. In private deals, earnest money can be held by a real estate attorney. It depends on the contract. You should have ha dan inspection contingency with a specified amount of time. If the inspection was done in that time frame, you get your money back. If it was after that time frame, you don't. If the box for inspection contingency was NOT checked, you don't get your money back. The contract is key :iagree:It really really stinks. It all depends on the contract. If contingencies weren't waived, they generally have 30 days to give you your money back. It gets a bit dicey if the contingency period had expired before the defects were discovered. What does the contract say about inspection and contingencies? Start from there. Christine W Quote Link to comment Share on other sites More sharing options...
Cammie Posted October 18, 2011 Share Posted October 18, 2011 Hire an attorney to write a threatening letter...sometimes that is all it takes. Everyone else is correct, however, so much depends on the nature of the contracts/documents involved and on the state you are in. However, in general, you will have an inspection contingency. Sounds like they failed that so you should get your money back. Quote Link to comment Share on other sites More sharing options...
Happy Posted October 18, 2011 Share Posted October 18, 2011 Escrow depends on the State... in some cases it is held by the broker, others an escrow company, and yet others by the Title company. In private deals, earnest money can be held by a real estate attorney. It depends on the contract. You should have ha dan inspection contingency with a specified amount of time. If the inspection was done in that time frame, you get your money back. If it was after that time frame, you don't. If the box for inspection contingency was NOT checked, you don't get your money back. The contract is key :iagree: Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted October 18, 2011 Share Posted October 18, 2011 (edited) We put a contract on a house. During the inspection' date=' several major issues were discovered that includes termites, a gas leak, mold, water infiltrating into the house in at least 3 hours, urine soaked carpet, a deck that is not built to code and siding that has been part of a class action law suit and is deteriorating. The siding is not covered under its warranty because it has been improperly installed. We spoke to our insurance company about this particular siding to see if it would be covered at all- it would not. We asked the buyers to fix all of these serious issues. They are only willing to fix the termites. We cancelled the contract and asked for our earnest money back since we do not agree to what they are willing to repair. They are refusing us our earnest money. We really don't want to go to abbartation or court if we don't have to. Any advice?[/quote'] The term used will normally be "Major issues affecting habitability" within the Purchase Agreement. Water damage, mold, deteriorating siding are all definitely major issues. You need to read the exact provision that permits you to cancel if significant problems are found. The worst real estate deals I ever did were with Realtors. They know absolutely NOTHING about legal issues and are only permitted to fill out forms. You need to write a demand letter to the broker/brokerage who holds the license for this Realtor. I cannot IMAGINE the Realtor did not make sure you retained a contingency for an acceptable inspection, but it could have happened. It all depends on what your contract says. State: We have a accepted Purchase Agreement on (full address). X is the Realtor who is handling this Purchase Agreement for us, the Buyers. On X/X/11, a full inspection of the property was done at our expense by (name Inspector and his Inspection Company), a duly licensed inspector in the state of (wherever). At this time, the following major issues were found: (list of significant items in Purchase Agreement) Our Realtor, X, has communicated with Seller's Realtor, X, and discovered that Seller declines to repair these major habitability issues. Pursuant to provision (name it, in the Agreement) we are hereby canceling the Purchase Agreement, effective (date), and you will find our Agreement for Mutual Cancellation (or whatever contract your Realtor is attempting to use in your state). Please be advised that pursuant to (whatever provision allows it in the Purchase Agreement), the earnest money of $XXXX must be refunded in full. Please remit a check in the amount of $xxxx to us at the aforementioned address within 3 business days. Thank you for your prompt attention to this matter. Edited October 18, 2011 by TranquilMind Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.