Buyer having issues with homeowners insurance due to claim I made

[daren_r]

What is the name of your state? VA
The CLUE database has struck again. I made a water damage claim on my home about 18 months ago. We had a pipe break under the bathroom sink. The damage was to extensive for me to attempt to repair.

We decided to put our home on the market in November and this issue was told to our Realtor at the time we put in on. It got a contract in Feb. The buyer had a home inspection and was aware of the water problem. We have no issues with mold because we had a licensed contractor in with dehumidifiers and starting the repairs within 12 hours of the time we found the damage.

The problem we have now is the buyer is having a difficult time getting insurance. She did find someone to insure at 800.00 a year. She is apparently not happy and my Realtor keeps telling me that the buyer may still be able to back out.

What I don't understand is how she could back out if she has found someone to insure the home regardless of the rate as long as it meets the lenders specifications. There is nothing in the contract stating that is contingent on her finding insurance at a rate she agrees with.

When my Realtor found out about the trouble she acted like we never told her about it. My wife and I made a point to explain exactly what happened before signing any paper work with the agent.

I feel that I am getting the runaround from my agent and she keeps hassling me about trying to dispute another claim I made prior to the pipe breaking incident. I have disputed that because the insurance company classified it as water damage when it was actually a shed that collapsed due to heavy wet snow that lasted for days (CLUE apparently does not differentiate between claims on the house or outbuildings). My Realtor also keeps going back and forth on the insurance issue the buyer is having. One day everything is fine, the next is an problem.

My question is can the buyer actually back out of the deal simply because she feels the insurance rate is too high? I understand nobody wants to pay a higher rate and had I known what a hassle this would have turned into I would have never turned in the claim on the collapsed shed. I had no choice on the broken pipe the damage was too extensive not need professional help. If it becomes and issue I am considering offering to give the buyer half of the first year premium just to see if that will appease them.

We are set to close Monday March 21st and I still don't have definite answer on whether the deal is going through or not. All communication is going through the agents and I don't even know if I am getting the whole story. I feel really bad that the rate is going to be higher because of two claims I made, but they were legit claims and I was not trying to take advantage of the company. We are trying to get the buyer in touch with my current insurance agency but she does not seem to have the initiative to keep hunting down insurance. What are my options at this point? I have been researching and researching and have not come up with much.

[BradleyS]

RE Broker in Kansas:

I am going to talk to my American Family Agent about this......

I don't agree with the buyer's insurance going up because you have had previous legitimate claims that were repaired.

At least with my insurance they check to see if the person who is buying the house has ever made claims, not the seller.

Question:

Did your REALTOR have you fill out a Disclosure Form or Property Condition Report?

If not, the REALTOR, if designated or exclusive, is not working in YOUR BEST INTEREST. But no matter what the agency relationship, the REALTOR must disclose all known defects as well.

If your REALTOR gave you the report, then it is your responsiblity to fill out the disclosure and give it back to the REALTOR, so she can make it available for any potential buyer.

Disclosure of all known defects, past or present, is a requirement in every state for all residental real property. I have looked at alot of court cases and appeals and Disclosure is probably the highest ranking.

Your REALTOR should have given you a disclosure report to fill out......all the problems that you have had, and know about, should be on this report.

I tell my agents to make sure that the sellers need to take time in filling out this report. It's just as important as the real estate contract.

And for future reference, you should and make sure that your disclosure are in writing and given to your REALTOR. Don't tell (verbally) your REALTOR about it, make sure you put it in writing.

I hate saying this......but it will be hard to prove what you told the REALTOR. And if the REALTOR is denying what you told them....I would call her Supervising/Managing Broker and explain your situation, and suggest/demand to have the Supervising Broker take over. Try it nice at first, if your still not happy then tell the Supervising Broker that you are going to refuse paying the Commission to the Brokerage**************I bet that will get you the attention that you DESERVE.

You should not have someone who lies, represent you.

If you would like more information on REALTOR responsiblities, send me a Private Message.

[rburkhalter]

Real Estate Broker in Texas

You have very valid points in that the contract does not state that the insurance rate has to be acceptable to the buyer. However, bottom line, if she does not hire an insurance company to "represent/insure" her then the lender will not approve the loan. If she signed the contract contingent upon receiving financing you're probably out of luck. If she did not, you may have a cause of action. I know you don't want to hear it but if the deal does not close on time I would just move on to the next person. It's not worth the expense trying to get something from someone who probably doesn't even have anything.

I agree with the other Broker in Kansas that your realtor may not be the most qualified, but I do not know all of the facts. It may be the buyer's realtor that is quashing the deal.

Your idea to see if your insurance provider would pick up the policy under her is a very good one and it has worked for me on several occasions. Worst case scenario you might offer to pay the buyer's insurance for the full year if you really need to make this deal work. If it busts out and you are unhappy with your realtor, I would hire another.

Most people don't know what reporting water damage claims to their insurance company can do to make it harder for them to sell their home. I think it's a crock because we pay monthly and when a claim or two comes up on the CLUE report they don't want to cover the home. Talk about a racket.

Anyway I hoped this help and good luck!!!