Breach of Contract?

Indiana. We signed a contract to buy a house, contingent on it passing inspections. The contract said we had 15 days to do the inspections and submit a "Buyers Response to Inspections". The house failed a septic inspection, so we put the remaining inspections on hold in order to decide whether to proceed. We decided to do a second septic inspection along with the whole house inspection and again the septic failed. We again stopped the remaining inspections so we could obtain estimates on replacing the septic, which took about a week. We were willing to buy the house with the faulty septic, so we proceeded with the final inspections. The well was found to be contaminated with e-coli bacteria. The sellers immediately had the well decontaminated and the water retested two days later. Which showed the water to be fine.

We requested an addendum stating we wanted the water retested two weeks later (one week after closing) and if the water was recontaminated the sellers would make the well right. The sellers refused to sign, saying we were past our 15 days. We are close to 30 days.

We have notified the seller's realtor (via our realtor) that we want a release from the purchase agreement because the sellers wouldn't comply with our request. We now want out regardless.

Can they hold us to the agreement? Can they keep the earnest money? We feel we were diligent in continuing the inspections once we were satisfied with each. We even accepted the septic problem as is.

Thanks,
Thollii (Sorry for such a long question)

[HomeGuru]

The sellers could be right if you as the Buyers did not request and were given an extension to the 15 days specified in the contract.
Ask Realtor.

Our realtor told us that's probably what she should have done. Wouldn't our realtor be liable to us for failing to recommend the extensions?

Can the sellers force us to buy the house as is, even if the well may have a recurring contamination of e-coli? I’m not as worried about losing our earnest money as I am being forced to buy the house or being sued for damages.

Thanks,
Thollii

[HomeGuru]

That is why your Realtor is an idiot and would be liable for ignorance and incompetence.
Now tell the Realtor that and for his/her firm to hire an attorney to review the contract and get you out of this mess.

I'd agree with that response. We've now been informed that the seller's realtor is saying we don't have a legal way out of the contract. Also, one of the owners of the realty company we're working with is taking over for our realtor in this matter. Our realtor is still hoping we can resolve any differences and close on the deal.

[HomeGuru]

Good luck and make sure the Principal broker of the firm your Realtor works at is helping you.

Thanks for the advice/help.

[HomeGuru]

No problem. Keep us posted.
I am interested in seeing how the firm gets you out.

Currently we are waiting for the Seller's realtor to give us, in writing, what the seller's intention is. (Release us from contract and our earnest money or proceed to court to detirmine what happens to the earnest money)

Our realty firm still has not hired an attorney. They want to do what they can without an attorney first.

How long can the trustee holding our earnest money just sit on it before she is obligated to settle any disagreements?

Thanks again for the advice.

[faithandhope]

Just for your information, that well problem is VERY COMMON and we see and hear about that daily in our business. Our neighbor, who is a realtor, just sold and his buyers had the exact same problem. They bought anyway. Here's why: We "shock" our well once a month, so do the neighbors, that's just part of owning a well. When you have a rain or extended drought time, it changes the bacteria count on a daily to weekly basis. We have had ours tested by the Natural resource Commission, as well as all our neighbors, and having low levels of e-coli is a natural thing. You just have to keep it shocked or bleached to try and regulate it. Most people on well systems would be suprised if they did check it to know there is e-coli there. You can also buy a chlorinator that hooks up to your well pump and dispenses it for you and they are not expensive. If you love the house, you should buy and not let that stop you. We also own a bed and breakfast/guesthouse logcabin in addition to our real estate inspection company and I would not expose patrons to our well if it could not be controled. Due diligence. Good Luck.

We decided to walk away from that one. We have two young girls and we didn't want to risk their health for the sake of getting this house. We are currently finishing inspections on another house that looks promising.

Our problem is we haven't received a signed release from the original house/contract and we haven't received our earnest money back. We've tried to be patient with our realtor because we don't want to ruin our deal on the new house. We think the Seller's realtor is stalling. If we don't have a resolution by the time we close on our new house, we'll approach the owner of realty firm our realtor is with to discuss what they are willing to do.

Thanks again for the information.

[HomeGuru]

Keep us posted.

We got our earnest money back! The sellers finally signed the release. I'm still not sure whether they had resisted or if their realtor had delayed having them sign it.

Thanks again for the advice.

[HomeGuru]

Good job.