Contract issues

My wife and I are first time home buyers - and we put an offer in on a house that got accepted - we were eager because we had an offer fall apart before.

I unfortunately did not scrutinize the document like I should have..  We initially said the appliances would be included but not guaranteed - but in the end they aren't leaving the appliances and it ended up in the contract that way.  They also wrote in that the central air conditioning was inoperable.   The contract states that I can back out only if there is a major repair/replacement of $1500 or more that the seller won't fix.

Well - being naive, I had MY agent pick the inspector.  Of course, nothing came in over $1500 except the central air.  There was found to be termite damage that was recently treated and repaired.  The roof also is 19 years old and has moss growing along with evidence of a previous leak in the attic.   I don't want to go through the whole laundry list here, but there were several other things that needed replacement orrepair.  None of them are over $1500, but added up they are a considerable cost.

At first, I figured I got the house at a good price with the seller concession so why complain?  I can put the money into it over time.   But the more I look at it, this might need considerable work right from the get go that I don't have money for.   There is an FHA appraisal this week - so if the appraisal comes in on key with minimal repairs needed to be done to satisfy FHA - am I stuck not being able to get the sellers to fix any of this?

I like the house.  But I have an uneasy feeling that both the roof and the termite issues might be more than meets the eye.  They had a deal fall apart about 4 months prior, and ended up listing the house again with significant reduction in price.

What are my options here?
  • March 03 2014 - US
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Answers (3)

Profile picture for sheehanje

Thank you for the replies.  I am contacting a contractor I know to look more closely at the roof.  I would like to get 4 - 5 years before I have to replace.

I also will be contacting the termite company to see the extent of damage they found and how old the damage is.   And also to see how much a maintenance contract will cost with them.

If both these come back reasonable - I will go ahead with the purchase.  All the other things can be fixed over time.  My issue is I can't buy this house and turn around right away with a lot of money with repairs.  It's going to cost enough to replace the appliances and for moving expenses.

Right now I have the Earnest Money deposit, the inspection money, and a deposit to Quicken Loans. So I stand to loose $1700 if I feel I have to back out.  The purchase agreement is signed.

One of the reasons I didn't hesitate to sign is I do trust my Realtor - but she went on vacation Friday - right after the inspection.  I have gotten uneasy with the lack of communication since then.  I did not expect (and I suspect she didn't either) that my conditional approval of the loan would only take 2 days in underwriting.   So now the FHA Appraisal is underway and yes, I have feet that are getting cold.

I will feel better after appraisal and having those 2 extra inspections done.

Thanks again for the input.'

John

  • March 04 2014
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Are you still within your home inspection contingency time frame? Have you executed the purchase and sale agreement yet? If not... I don't care about that stipulation regarding "only repairs over $1,500" (You can make your stand and ask for seller concession NOW, or back out!)  who's to say what cost $1,500... new roof, termite damage was treated but not repaired (sills maybe?), etc.etc.etc.

If your time frame for home inspection contingency ran out but you have not signed P & S or given your large deposit monies yet... you can try to negotiate it and play hard ball (your small deposit may indeed my in jeopardy if you choose to walk BUT #1 the seller would not wish to jeopardize his sale (if he took you to court to attempt obtaining that deposit, he is at risk of not being able to sell his home to another buyer during that court battle) #2 you can in all likelihood close faster than anyone else at this point and the seller may think its easier to simply come to a compromise with you.

If the P & S is done, inspection contingencies are gone, large deposit is in escrow... Your in a MUCH more difficult position to "make a stand" and somebody clearly failed somewhere to communicate or ensure you wanted to proceed. The tactics & methods I would use in this position as a buyer agent are a little harsh to post publicly,  but you could always talk to a local attorney to inquire about options.

 
  • March 04 2014
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Read through your contract carefully again. The reasons you can back out of the deal should be specified. Of course, if you are willing to lose your escrow, you can back out at any time. Sounds to me like you just have cold feet, which is not unusual. Do you trust your Realtor? The inspector your Realtor recommended is probably someone they trust. Remember your Realtor represents YOUR best interests. Why not sit down with him or her and discuss your concerns. Put everything on the table. If you're not satisfied after that conversation, speak with the broker.
  • March 03 2014
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