Getting out of a rotten DEAL

What is the name of your state? Alabama

Hey,

So my case is a bit complicated. I found a house; seemed perfect. Nice outside and inside, good price. Signed contract accepted. Went with an inspector and down in the basement there was a LOOONG horizontal crack I didn't see. The inspector referred me to a foundation specialist. He said he can't tell. Wanted more inspections but the 7 day inspection contingency is running out. My agent kinda pressured me into signing off on the inspectors contingency with an additional contingency of satisfactory inspection of foundation by the buyer within a week. Now, even if I do inspect again, who knows and I realized I don't want all this headache and just want to back out totally. I sent mutual release, but now the sellers are giving me trouble and want to keep the ernest money. What the heck. What do I do? Do I simply go to the house on prescribed day, say that the foundation is not up to my satisfaction and get out of the deal on that contingency, or do I try with other contingencies (like the financing contingency)??? please give me some advice.

Jeremy

Did you have a 'foundation' specialist look at the cracks to determine if there is a serious problem? Just because you see a crack on the foundation does not mean there's a serious problem - I'd bet that its just a settling crack which is NOTHING. If your 'specialist' finds a problem, it has to be a valid problem, believe it or not the SELLER's can dispute your finding if it totally bogus.

In regards to the financing contigency, I suggest reading the fine print on the contract, many standard contracts include an option for the SELLERS to obtain a mortgage for a BUYER if the buyer is unable to obtain one themselves. This means that if you try to welsh on this deal by saying you can't get a mortgage at the rate on the contract, the buyers can legally force you to go to their lender and divulge your financials to see if their lender is willing to obtain a loan for you.

Bottomline - If there is nothing wrong with the foundation, and your financing contingency is met, the buyers DO HAVE A RIGHT to the earnest money.

If you're experiencing buyer's remorse and want out of the deal, you need to be willing to compensate the sellers - I'd suggest contacting them to see if you could give them some $$ to get out of the deal and enable them to sell/market their home to someone else. Bear in mind, your 'headache' has NOTHING to do with the sellers their only mistake was accepting your offer and signing a contract with you - As noted above, a crack in the foundation is most likely not a major problem.

**FYI** Your real estate agent did nothing wrong, adding a continency based on the foundation was within your best interest.

[Souix]

Originally posted by Jeramy
What is the name of your state? Alabama

Hey,

So my case is a bit complicated. I found a house; seemed perfect. Nice outside and inside, good price. Signed contract accepted. Went with an inspector and down in the basement there was a LOOONG horizontal crack I didn't see. The inspector referred me to a foundation specialist. He said he can't tell. Wanted more inspections but the 7 day inspection contingency is running out. My agent kinda pressured me into signing off on the inspectors contingency with an additional contingency of satisfactory inspection of foundation by the buyer within a week. Now, even if I do inspect again, who knows and I realized I don't want all this headache and just want to back out totally. I sent mutual release, but now the sellers are giving me trouble and want to keep the ernest money. What the heck. What do I do? Do I simply go to the house on prescribed day, say that the foundation is not up to my satisfaction and get out of the deal on that contingency, or do I try with other contingencies (like the financing contingency)??? please give me some advice.

Jeremy

**Was your contract contingent of a satisfactory inspection? Did you sign the Release within the contingency time period? If so, the sellers needs to refund your earnest money to you. For the sake of a paper trail, your agent can prepare an Addendum indicating your rejection due to your dissatisfaction with the inspection by the time period specified in the contract. Be honest, do not say its because of the financing contingency when it isn't. Your agent should know how to handle this.**

[Souix]

Originally posted by Don_Trump
Did you have a 'foundation' specialist look at the cracks to determine if there is a serious problem? Just because you see a crack on the foundation does not mean there's a serious problem - I'd bet that its just a settling crack which is NOTHING.


**Mr. Trump - I would not tell people this when you don't know for sure. You are not there, you did not do the inspection**


If your 'specialist' finds a problem, it has to be a valid problem, believe it or not the SELLER's can dispute your finding if it totally bogus.


**If the buyer does not like the inspection for any reason, he can back out. It is very specific on each sales agreement, that the only thing the buyer needs to do is give written notice**



In regards to the financing contigency, I suggest reading the fine print on the contract, many standard contracts include an option for the SELLERS to obtain a mortgage for a BUYER if the buyer is unable to obtain one themselves. This means that if you try to welsh on this deal by saying you can't get a mortgage at the rate on the contract, the buyers can legally force you to go to their lender and divulge your financials to see if their lender is willing to obtain a loan for you.

Bottomline - If there is nothing wrong with the foundation, and your financing contingency is met, the buyers DO HAVE A RIGHT to the earnest money.


**This is the buyer**


If you're experiencing buyer's remorse and want out of the deal, you need to be willing to compensate the sellers - I'd suggest contacting them to see if you could give them some $$ to get out of the deal and enable them to sell/market their home to someone else.


**This is incorrect. Let the Realtors advise him based on what the contract says**



Bear in mind, your 'headache' has NOTHING to do with the sellers their only mistake was accepting your offer and signing a contract with you - As noted above, a crack in the foundation is most likely not a major problem.


**Again, don't advise people about things that you actually have not seen**



**FYI** Your real estate agent did nothing wrong, adding a continency based on the foundation was within your best interest.

**This is correct. The Realtor will know how to handle this**

[HomeGuru]

Writer, have a real estate attorney review your contract for contingencies that would allow you to walk.

Sioux -
Thanks for your partially valid response - I do think you should READ before trying to correct someone else.

1) I instructed the poster to have a specialist look at the cracks - If you READ his post you'll see that he was planning on simply walking in himself and saying I WANT OUT - My notation regarding it being nothing was not based on an examination but on the fact that it is his right to have it examined, but be aware that most cracks are settling and are NOTHING. He definitely should have someone look at the foundation if he is concerned.

2) You are right, I did mistype - I meant to say that the SELLERS can sometimes obtain a mortgage if a buyer claims he can't. HomeGuru's advise was accurate he needs to re-examine the contract.

If you READ the posters post you'd determine that he simply wants out regardless of the foundation. My post was based on informing him that he has caused the sellers some expense/time and that he should be willing to compensate them if he has cold feet.

Have a nice day -

DT

[HomeGuru]

[quote]Originally posted by Don_Trump
[b]Sioux -
Thanks for your partially valid response - I do think you should READ before trying to correct someone else.

1) I instructed the poster to have a specialist look at the cracks - If you READ his post you'll see that he was planning on simply walking in himself and saying I WANT OUT -

**A: based on the additional contingency as stated in the writer's post, the writer could in fact look at the crack and say "I do not accept" or hire an engineer to give an opinion after which the writer could make the same statement.
**********

My notation regarding it being nothing was not based on an examination but on the fact that it is his right to have it examined, but be aware that most cracks are settling and are NOTHING. He definitely should have someone look at the foundation if he is concerned.

**A: all cracks are something and not nothing, so your use of the term nothing is misleading.
**********
2) You are right, I did mistype - I meant to say that the SELLERS can sometimes obtain a mortgage if a buyer claims he can't. HomeGuru's advise was accurate he needs to re-examine the contract.

**A: no comment.
********

If you READ the posters post you'd determine that he simply wants out regardless of the foundation.

**A: no, my opinion is that he wants out because of the foundation.
*********
My post was based on informing him that he has caused the sellers some expense/time and that he should be willing to compensate them if he has cold feet.

Have a nice day -

DT

**A: the writer has no obligation to compensate the Seller for anything. Especially if the contingencies provide a way to get out of the contract.
I disagree with your bottomline statement that if there is nothing wrong with the foundation the Seller has a right to keep the earnest money.

HG -
Thanks for your response -

You're wrong regarding 'cracks' and the buyers ability to get out of this deal. You are correct that the poster should have an attorney review the contract and a structural engineer examine the cracks, however your wrong in regards to;
**A: all cracks are something and not nothing, so your use of the term nothing is misleading.
1) Some cracks are nothing - by nothing I mean that they are normal wear on a home that is settling, it would not be just cause to welsh on a deal due to a settling crack.

**A: based on the additional contingency as stated in the writer's post, the writer could in fact look at the crack and say "I do not accept" or hire an engineer to give an opinion after which the writer could make the same statement.

2) If the buyer had an engineer who concurred that the cracks are in fact SOMETHING and need to either be repaired and/or reduce the value of the home - YES, the buyer could use his contingency to cancel the contract - HOWEVER, the seller would then be OBLIGATED to disclose the cracks to anyone who looked at the home - This means that if the cracks are settling cracks, then the buyer can't bail without recourse since settling cracks do not require repair and do not reduce the value of a home.

I'm not trying to be rude, but the buyer cannot simply say - I don't want it, or these cracks are serious (when they're not) and cancel the contract. If the buyer has cold feed, and cannot legally cancel the contract through a contigency then the seller can hold the earnest money and the buyer responsible. Bear in mind taht the seller cannot market/list/sell the home to anyone else as long as they have a contract on the home.

IMO, the best bet would be to handle the matter amicably -

Have a nice day -

DT

[Souix]

Originally posted by Don_Trump
HG -
Thanks for your response -

You're wrong regarding 'cracks' and the buyers ability to get out of this deal. You are correct that the poster should have an attorney review the contract and a structural engineer examine the cracks, however your wrong in regards to;
**A: all cracks are something and not nothing, so your use of the term nothing is misleading.
1) Some cracks are nothing - by nothing I mean that they are normal wear on a home that is settling, it would not be just cause to welsh on a deal due to a settling crack.

**A: based on the additional contingency as stated in the writer's post, the writer could in fact look at the crack and say "I do not accept" or hire an engineer to give an opinion after which the writer could make the same statement.

2) If the buyer had an engineer who concurred that the cracks are in fact SOMETHING and need to either be repaired and/or reduce the value of the home - YES, the buyer could use his contingency to cancel the contract - HOWEVER, the seller would then be OBLIGATED to disclose the cracks to anyone who looked at the home - This means that if the cracks are settling cracks, then the buyer can't bail without recourse since settling cracks do not require repair and do not reduce the value of a home.

I'm not trying to be rude, but the buyer cannot simply say - I don't want it, or these cracks are serious (when they're not) and cancel the contract.


**Yes, a buyer can. You need to get your facts straight. If you don't know the correct answer, don't answer the question. Writer has been advised to check his contingency in the contract. You have no way of knowing what the language is on that state's purchase agreement or what his contingency states. If buyer is dissatisfied with the inspection of the home he can back out FOR ANY REASON WHATSOEVER, and still get his earnest money deposit back provided written notice is given within the contingency time period. All that is needed is an Addendum, signed by the buyer, indicating his dissatisfaction with the home inspection and his desire to cancel the transaction because of it.**

**Writer...will you please state the exact language on your inspection contingency clause for Mr. Trump.**



If the buyer has cold feed, and cannot legally cancel the contract through a contigency then the seller can hold the earnest money and the buyer responsible. Bear in mind taht the seller cannot market/list/sell the home to anyone else as long as they have a contract on the home.

IMO, the best bet would be to handle the matter amicably -

Have a nice day -

DT

[Souix]

In the absence of our original writer I am posting what our sales agreement says with regard to the Professional Inspection clause. When the writer returns he can then verify if his sales agreement in Alabama is basically the same.


"Buyer may notify seller or seller's agent, in writing, of Buyer's unconditional disapproval of the property based on any inspection reports, in which case, all earnest money deposits shall be promptly refunded and the transaction shall be of no further binding effect. Buyer shall promptly provide a copy of all reports to Seller if requested by Seller. If Buyer fails to provide Seller of Seller's Agent with written unconditional disapproval of any inspection reports by Midnight of the final day of the Inspection Period, Buyer shall be deemed to have accepted the condition of the Property."

Sioux -

Thanks for your reply - I appreciate that your tone is based on getting the facts and not on insults.

You fail to recognize that the SELLER would need to DISCLOSE any/all significant issues/problems which were determined a prior inspection. If the poster/buyer cancelled the contract due to a structural problem with the foundation, the buyer would need to disclose it to future buyers.

Basically, having an inspection contigency can normally enable someone to back out of a contract - however since this contingency has been only for the foundation, the buyer would need to have/find a problem with the foundation, he cannot FOR ANY REASON WHATSOEVER cancel the contract.

You are 100% correct that the exact wording of this contigency would dicate how/i this buyer can legally cancel the contract.

DT

[HomeGuru]

[quote]Originally posted by Jeramy
[b]What is the name of your state? Alabama

**************..Wanted more inspections but the 7 day inspection contingency is running out. My agent kinda pressured me into signing off on the inspectors contingency with an additional contingency of satisfactory inspection of foundation by the buyer within a week.

**A: based on the writers post, it is my opinion that the writer can back out of the deal upon completion of this second inspection due to the basement wall and crack being not satisfactory to the Buyer.
Until the actual language is known, no one is able to make a confirmation response.

[HomeGuru]

[quote]Originally posted by Don_Trump
[b]HG -
Thanks for your response -

You're wrong regarding 'cracks' and the buyers ability to get out of this deal. You are correct that the poster should have an attorney review the contract and a structural engineer examine the cracks, however your wrong in regards to;
**A: all cracks are something and not nothing, so your use of the term nothing is misleading.
1) Some cracks are nothing - by nothing I mean that they are normal wear on a home that is settling, it would not be just cause to welsh on a deal due to a settling crack.

HomeGuru: and why not? If the contingency allowed the Buyer the right to terminate the transaction for any condition (no matter how small), then the Buyer would be able to terminate. You have no idea what you are talking about here. I have seen many Buyer's terminate a transaction due to settling cracks. Further, you are deviating from the initlal post. The writer asked whether he could cancel or not. There was no discussion about disclosure and what the Seller needed to do regarding disclosure.

==========

**A: based on the additional contingency as stated in the writer's post, the writer could in fact look at the crack and say "I do not accept" or hire an engineer to give an opinion after which the writer could make the same statement.

2) If the buyer had an engineer who concurred that the cracks are in fact SOMETHING and need to either be repaired and/or reduce the value of the home - YES, the buyer could use his contingency to cancel the contract -

**A: you are just guessing since you really do not know the exact language of the contract contingency. What do you keep guessing when you do not know what you are talking about? Thus far there is nothing in the contract that concurs with your premature statement. There is nothing about the Buyer having the right to cancel if an engineer agrees that there needs to be some sort of repair and the crack causes a value reduction of the property.
============



HOWEVER, the seller would then be OBLIGATED to disclose the cracks to anyone who looked at the home - This means that if the cracks are settling cracks, then the buyer can't bail without recourse since settling cracks do not require repair and do not reduce the value of a home.

**A: once again, you are making some terribly erroneous and unsubstantiated statements. The subject of this thread has nothing to do with Seller disclosure. In addition, there is no disclosure law or real estate contract law for that matter, that states that if the cracks are only settling cracks, the Seller need not disclose the cracks. Further, your statement of "settling cracks do not require repair and do not reduce the value of a home" is false. I have worked on numerous construction defect and seller disclosure litigation cases involving settlement cracks, and there have been cases where that type of cracks needed repair and reduced the value of the property.
===========
I'm not trying to be rude, but the buyer cannot simply say - I don't want it, or these cracks are serious (when they're not) and cancel the contract. If the buyer has cold feed, and cannot legally cancel the contract through a contigency then the seller can hold the earnest money and the buyer responsible. Bear in mind taht the seller cannot market/list/sell the home to anyone else as long as they have a contract on the home.

IMO, the best bet would be to handle the matter amicably -

Have a nice day -

DT

HomeGuru: please give it a rest already as your statements to back up your faulty responses get worse and worse. Before you make such further statements, please have a better grasp at real estate and construction law and structural engineering.

[HomeGuru]

[quote]Originally posted by Jeramy
[b]What is the name of your state? Alabama

**************..Wanted more inspections but the 7 day inspection contingency is running out. My agent kinda pressured me into signing off on the inspectors contingency with an additional contingency of satisfactory inspection of foundation by the buyer within a week.

**A: based on the writers post, it is my opinion that the writer can back out of the deal upon completion of this second inspection due to the basement wall and crack being not satisfactory to the Buyer.
Until the actual language is known, no one is able to make a confirmation response.

[HomeGuru]

Originally posted by Don_Trump
Sioux -

Thanks for your reply - I appreciate that your tone is based on getting the facts and not on insults.

You fail to recognize that the SELLER would need to DISCLOSE any/all significant issues/problems which were determined a prior inspection. If the poster/buyer cancelled the contract due to a structural problem with the foundation, the buyer would need to disclose it to future buyers.

**A: so what. This is not relevant to the subject of this thread. Now tell us just what all of this has to do with this thread? Seller disclosure has nothing to do with this thread.

********
Basically, having an inspection contigency can normally enable someone to back out of a contract - however since this contingency has been only for the foundation, the buyer would need to have/find a problem with the foundation, he cannot FOR ANY REASON WHATSOEVER cancel the contract.

You are 100% correct that the exact wording of this contigency would dicate how/i this buyer can legally cancel the contract.

**A: so if that is the case and you agree 100% with Souix, what is with your preceeding statement? You are really contradicting yourself.

DT