Seller refuses to make repairs!

[recgirl2]

I live in Southern California and am in the process of purchasing my first home through an FHA loan. I had not yet been approved for my home loan when I made the offer on the condo I am purchasing, however I had no reason to think I would be denied. Unfortunately I was denied and I decided to cancel my offer. In the meantime, the 45-day escrow had already begun. The selling agent asked me not to back out, but to go through another lender and try to get approved. In the meantime she said to put everything on hold until I was approved. Two weeks later I was approved and the buying process moved forward. We waited to do a home inspection until after my loan was approved, per the selling agent's suggestion. The home inspection was conducted last week and turned up numerous repairs and problems that were not disclosed by the seller - namely a broken furnace, leaky and moldy water heater, plumbing problems under both bathroom sinks, dry rot in the deck outside, broken exhaust fans, broken microwave over the stove, a broken thermostat, and defective smoke detectors. The appraisal did not reveal any of these things - the appraiser only listed the items I had already pointed out - namely the water heater and the mold which is very obvious. My realtor sent the home inspection report to the selling agent and stated that, although the repairs were numerous and it appeared that the seller had failed to disclose many of the items, I was willing to go forward with the purchase if the seller replaced the broken furnace and the thermostat - a cost of about $2000. The seller refused, saying he would make other repairs and I could take the funds set aside in the contract ($600) and use that towards a new furnace. The selling agent is also claiming that we are lying about the other repairs that were lsited and claims that many of the broken items do work. In addtion, the selling agent has been verbally abusive to my agent. She "lost" my escrow check, then claimed my agent had never sent it to her, when in fact it laid at the bottom of the file my agent sent to her for 1 1/2 months. I had to place a stop payment on the check and write a new one. She also failed to disclose right away that she is related to the seller (it's her son), and she was supposed to conduct a termite report over a month ago and still hasn't.

I want to buy the property and all I am asking the seller to do is replace the furnace and thermostat. My agent says that I can't force the seller to meet my request because we conducted the home inspection so late in the escrow period. What I need to know is, do I have any leverage to make the seller repair the furnace? Am I stuck buying the house "as is" (there is no "as is" clause in the contract)? Do I have any recourse through FHA, since the appraiser didn't follow through on checking the property according to their guidelines? My next step is go through an arbitrator for a resolution. If anyone out there has any info or advice I would really appreciate it. Thanks!

 

[HomeGuru]

I live in Southern California and am in the process of purchasing my first home through an FHA loan. I had not yet been approved for my home loan when I made the offer on the condo I am purchasing, however I had no reason to think I would be denied. Unfortunately I was denied and I decided to cancel my offer. In the meantime, the 45-day escrow had already begun. The selling agent asked me not to back out, but to go through another lender and try to get approved. In the meantime she said to put everything on hold until I was approved. Two weeks later I was approved and the buying process moved forward. We waited to do a home inspection until after my loan was approved, per the selling agent's suggestion. The home inspection was conducted last week and turned up numerous repairs and problems that were not disclosed by the seller - namely a broken furnace, leaky and moldy water heater, plumbing problems under both bathroom sinks, dry rot in the deck outside, broken exhaust fans, broken microwave over the stove, a broken thermostat, and defective smoke detectors. The appraisal did not reveal any of these things - the appraiser only listed the items I had already pointed out - namely the water heater and the mold which is very obvious. My realtor sent the home inspection report to the selling agent and stated that, although the repairs were numerous and it appeared that the seller had failed to disclose many of the items, I was willing to go forward with the purchase if the seller replaced the broken furnace and the thermostat - a cost of about $2000. The seller refused, saying he would make other repairs and I could take the funds set aside in the contract ($600) and use that towards a new furnace. The selling agent is also claiming that we are lying about the other repairs that were lsited and claims that many of the broken items do work. In addtion, the selling agent has been verbally abusive to my agent. She "lost" my escrow check, then claimed my agent had never sent it to her, when in fact it laid at the bottom of the file my agent sent to her for 1 1/2 months. I had to place a stop payment on the check and write a new one. She also failed to disclose right away that she is related to the seller (it's her son), and she was supposed to conduct a termite report over a month ago and still hasn't.

I want to buy the property and all I am asking the seller to do is replace the furnace and thermostat. My agent says that I can't force the seller to meet my request because we conducted the home inspection so late in the escrow period.

**A: it depends on how the contract was written. If you are not protected, then your agent is a terible agent and may be full of crap.
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What I need to know is, do I have any leverage to make the seller repair the furnace?

**A: see my response above.
If your contract was written correclty with the proper contingencies, then you should be able to terminate the contract or request that the Seller make repairs.
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Am I stuck buying the house "as is" (there is no "as is" clause in the contract)?

**A: no and you should have an attorney review the contract for you since your agent is ignorant.
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Do I have any recourse through FHA, since the appraiser didn't follow through on checking the property according to their guidelines?

**A: yes as you can use the Homebuyer's Protection Act to your benefit against the faulty appraiser. www.hud.gov
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My next step is go through an arbitrator for a resolution. If anyone out there has any info or advice I would really appreciate it. Thanks!

**A: first try mediation as part of alternative dispute resolution.
Your attorney can help you with that.

 

[shaylahc]

Basically its like this--the seller doesn't have to do anything they don't want to. However YOU do have the choice as to whether or not you want to pursue the sale.

Look over your contract carefully. In most contracts there is a home inspection contingency. Usually it will say something along the lines of "home inspection will take place within X number of days of going into contract. If any defects are discovered then the buyer has the option of a) getting out of the contract if the cost for repairs exceeds X number of dollars, b) submitting a list of demands within X number of days from the completion of inspection (in other words, at this point you still have the option to terminate the contract and walk away with your earnest money) or c)accepting the house in the "As is" condition. You have to be very careful because a lot of contracts have an implied acceptance clause...in other words, it will likely be worded something like "if buyer does not submit a list of demands within X number of days after the home inspection is completed, then they agree to accept the house "as is" and the sale will go forward regardless of whether or not the seller agrees to make any repairs".

You can always choose to walk away and lose your earnest money. Or there may be a clause in your contract that says if the repairs exceed X number of dollars you have the option to walk away. In the end, the decision is up to you. The seller doesn't HAVE to fix anything if he doesn't want to, but then again you don't HAVE to buy his house.

HTH. Keep us posted!