INSPECT. FINDINGS/CAN I GET OUT OF CONTRACT?

We have signed a contract for the purchase of a home. The Sellers have agreed to the price. The home inspection was done and found many defects/problems that will be quite costly to repair. One of which is a leaky basement! We had a list of 10 items that we wanted the Sellers to take care of, at their cost, prior to closing. They only agreed to 4 of the 10 and one of which was NOT the leaky basement! We have decided we no longer want the house. Can we release ourselves from the contract? The Sellers have lost no time with their home on the market as this has all transpired over a 48 hour period. Our agent took it upon herself to go back to them 2 MORE TIMES to get them to concede to all 10 items even though we specifically told her we no longer wanted the house. Do we have any recourse against her? Please help a.s.a.p. as they are now threatening us with litigation. Thank You!

Did the purchase agreement include an inspection contingency? Assuming it did, you should be able to cancel the contract without recourse and without forfeiting your earnest money.

If they sue, what would they sue for? They didn't lose anything if this all transpired in 48 hours. Sure they could sue for specific performance, but you have a very strong case concerning the inspection contingency in my opinion particularly if there were items that came up as a result of the inspection that you did not ask initially to have fixed. Most likely the negotiations concerning the work items were all done verbally??

I would cancel the contract and fire the real estate agent for going against your wishes and negotiating the other 6 items. There's an agent who is focused more on getting paid then your best interests.

Since I'm not an attorney as my disclaimer says, you should check back for Homeguru's opinion on this to be sure.

David,

THANK YOU SOOO MUCH for your quick response. Yes there is an Inspection contingency stating that if defects were found during the course of the inspection, the Purchasers have the right to ask they be fixed by Sellers. it states that the Seller has 5 days to respond. If the Purchasers do not accept the Sellers response, then the parties "SHALL" have an additional 5 days from the date of Seller's response to reach a final agreement. It doe's NOT state that we HAVE to give 5 additional days. And that if no agreement is reached, either party may terminate the agreement. That was my feeling as well. . . that they have no grounds to sue since we fulfilled out part of the obligation to give them the opportunity to fix the items and they chose not to. And yes, by the agent going back 2 more times, all of those "negotiations" were verbal. We have the original Addendum and their agent said he was going to have them write an ADDITIONAL one stating they would fix everything. As far as we're concerned, what we have in writing is the only thing that holds any merit. What they agreed on verbally, against our wishes, by and between our agent and theirs, is a mute point and is considered heresay. Again, thank you so much for your response, it is greatly appreciated!

Now slow down a little though. Don't get too excited. If your agent was able to negotiate the other six items within the five day period that your contract allowed then technically you may still be "under contract". In other words you may be in violation of the contract which could mean at minimum loss of earnest money.

I highly doubt they would go through the effort and money to sue you because of the minimal marketing time lost but you can bet they will not freely send back your earnest money.

This of course means you'd have to fight to get it back either from the sellers or perhaps from the agent who went against your wishes. Obviously if the agent hadn't persisted with the negotiations, the five days probably would have run out and the contract would have been null and void. Now becuase of your agents actions, the seller probably has a right to keep your earnest money and possibly even sue you.

The fact that your agent negotiated this outcome against your wishes is the part that I'm not confident about in terms of any potential recourse you may have against that person. Now more than ever I think you should check back for HG's response or get a consult with an attorney pronto.

I don't mean to burst your bubble but I'm saying that my opinion is not the opinion you want. You want an attorney's.

Good luck and keep us privy on the details.

About the earnest money:it was never physically accepted by the Seller and it is now (the check) in the hands of the new agent. The check has not been cashed and she assured us that it wouldn't be. She has also had us sign an Addendum, stating "Due to Addendum Home Inspection and items listed that were not going to be repaired, makes this an unacceptable home to Purchasers. Please sign the attached "Release Agreement". Nor did we ever provide them a pre-approval letter for the loan, which is an item they requested. We still have not seen anything else in writing that states that they have agreed to all items listed. As far as we're concerned, it still stands as heresay. I sure wish HomeGuru would see this post! We do still plan on getting the opinion of an attorney in any case. This "move" has all been done as a relocation and we do have the assistance of the relo company who has already been contacted as to the actions of our agent. At the very least, I feel the agent should be reported to the Real Estate Board regarding her unprofessional conduct and questionable work ethic. What are your thoughts on that? Didn't mean to seem "over excited" . . . just thinking positive!

[HomeGuru]

I agree with the responses from David Miller.

It appears that as far as you are concerned, the contract is terminated and is therefore null and void. In real estate, there is what is known as the Statute of Frauds which means that all real estate contracts must be in writing to be enforceable. So even if your real estate agent agreed to the 10 items for you, the agreement does not hold water because you would need to have signed the agreement/addendum as the Buyers to the original contract in order to validate the agreement.
If you had signed such a document, only then would the Seller have recourse against you due to the enforceability of the contract.

There would also be other questions raised anyway, such as contingencies of financing, real esate appraisal etc., so in my opinion, the transaction was far from a solid one.
The original contract may not have even been binding if the earnest money check was not cashed if there was a contingency over paying such a deposit within a specififed time frame.

Dear HomeGuru,

Thank you for your response. Now, let me see if I am understanding you correctly. IF the Seller had come back, in writing, stating they would take care of all 10 items, and IF we had signed THAT Addendum, then they would have recourse? As far as the earnest $ goe's. . . It was a deposit and states, in the original contract, that it would be held in escrow until the agreement is consummated by both parties, or , the agreement is terminated. The check was never placed into escrow. . . it is still sitting in our folder with our new agent. The only SIGNED documents we have are the original contract and the Addendum where they crossed off the items they would not correct/fix. Also, I have been researching on this topic since this started. In going over their Virginia Disclosure Statement and the inspection report, I have found a few items that they willfully did not disclose and which have become "issues". One of which is a buried oil tank. They stated on the disclosure statement that there were none. When it was found during the inspection, and we were told that by State Law, this had to be either A) dug up and removed and a soil test done to test for contamination or 2) Inspected and rendered "harmless" by a licensed state office, the owner then admitted to knowledge of it's existance and said it had been "filled with sand". Is this not a case of disclosure fraud? They knowingly falsified the disclosure document. Now, my question is this. . . since we have signed a "release Addendum", and they are arguing it, do we actually have to wait for their signature to be released from this contract? As they can not accept any other offers on their home nor can we sign a contract for another home at this time. There are other major issues that were not disclosed as well. Now, I not only question their honesty, but, even if we agreed to have them fix everything, I doubt highly that it would be done correctly or even by state law standards.

[HomeGuru]

They must sign in agreement that the transaction is terminated but you need not wait for their signatures. In my opinion, there never was a contract so you do not need their approval to be released form the contract. You need their aproval to terminate the transaction. This is standard procedure with escrow companies.
You may still proceed to turn in other offers on other properties.

Dear HomeGuru,

Thank you for your input. I will keep you posted, as I should be hearing something from "their side" today.

[HomeGuru]

Ok.

Thanks for your input HG. I forgot all about Statute of Frauds. I'll have to commit that to memory for future. Is that a federal requirement?

[HomeGuru]

It is basically a State law. But could be used in Federal cases as well.
Just remember the Statute Frauds and the Statue of Liberty.

Peace Brother.

Hi HomeGuru and David!,

I wanted to give you an update as to the "situation". Apparently their agent brought over a "clean" copy of the Addendum where it is stating the Sellers would take care of all 10 items. I told my agent that as far as I'm concerned, I haven't seen anything else in writing except the original Addendum, signed and dated by both Buyer AND Seller and I don't plan on looking at anything else. I told her that I am in possession of the ORIGINAL so therefore, he is using a bogus Addendum. I also advised her that the Sellers lied on their Disclosure statement concerning a number of items. The way I am aware that the lied is that the owner came home during the inspection, was notified of one of the major items, and admitted, in the company of 3 people, that the underground oil tank had been filled with sand. On their disclosure statement, they were specifically asked if there was an underground oil tank and they checked the box "NO", not "I don't know". . . "NO"! I also explained to her the Statute of Frauds (and not to be confused with the Statue of Liberty!) as well as committing Fraud with their disclosure statement. Their agent notified her that his Sellers had sought legal counsel and that their legal counsel "THINKS they have a binding contract". My agent then notified him that we have also spoken with legal counsel and that his Sellers weren't entirely honest with their Disclosure statement. He then started to "hem and haw". As it stands, I should hear something further today. He said he would have to go back and talk with his Sellers. Do either of you know where, and with whom, I would be able to file a complaint against our old agent? If she had done as we wished, we wouldn't be in this mess. She just got angry and decided to "push" the issue. She told me on several occasions that she wasn't making enough money "on this deal" and it wouldn't even cover her gas (running us around) and her time invested. A bit inappropriate, don't you think?
Will let you know when I hear further. Thanks Guys!!

[HomeGuru]

Very good defense.
Keep it up.

You can file complaints against the agent with the local Board of Realtors and the State Agency that licenses real estate agents. I would suggest having a talk first with her principal broker because her broker is the one officially responsible for her actions. If you need some evidence against her, read the State licensing and regulatory laws. Also read the NAR (National Association of Realtors) Code of Ethics. Go to [url]http://www.realtor.com[/url] then go to NAR and then Code of Ethics.

If you need more ammo against the Sellers, read the State Seller Property Disclosure Law.

The truth is out there.

Hi,

Geez, I've even had that website "bookmarked" for quite some time as I use it a lot when I'm "house hunting"! It is proving to be very informative. I was able to find an address for a local real estate board and am requesting info. from them. I did read over "The Virginia Residential Property Disclosure Act" (several times!) since this started. It is quite explicit in that "the purchaser may terminate the purchase contract in the event of a misrepresentation . . . " Maybe they ought to read the documents they sign as well. It's getting later into the afternoon and I haven't heard a word yet but, I have my "ducks in a row" just in case. Will give you an update as soon as I have one. I really hope others are out there reading this so they can cover themselves and not fall prey to dishonest Sellers. One more thing, I did speak with her principal broker as well as the Regional Director for her office. They both seemed to be quite appalled by her actions. They are keeping well informed of the situation and are trying to rectify things to the best of their ability. Although, since the original agent is on vacation, I think some heads may roll upon her return!