Home Inspection Refund - Is It Possible?

[shiver222]

What is the name of your state (only U.S. law)? Minnesota

I also posted much of this in the home buying forum, but didn't recieve a follow up regarding the small claims portion of the issue. Sorry for the double post, but my time to sign the Cancellation of Purchase Agreement release is running short and I want to decide if I will take it to small claims first.

Here's the backstory :

My husband and I are first time home buyers. We made an offer, signed a purchase agreement, and put down $1000 earnest money on Oct 19th. We received word on Oct 20 that our offer was accepted.

Our purchase agreement had a clause stating offer was contingent on property inspection. We paid for and completed the inspection within 48 hours. There were 3 defects that we requested repair or credit for in a signed addendum . The seller responded back within 48 hours saying she would not budge any lower and would not sign this addendum.

At this time my husband and I deliberated and decided that we would still go through with the purchase by financing the repairs into the mortgage instead. The main repair is an electric upgrade that needed to be complete before homeowner insurance would cover the property. We arranged for an electrician to take a look and give us an estimate in writing.

When the electrician arrived at the property with our agent, the seller's agent was there speaking with the owner. She informed our agent that the seller has now changed her mind and decided she does not want to sell the property after all.

I want to at least try to recover the Inspection Fee of $300. We locked our interest rate at a very low 6% but that expires Dec 4th. Unless we find something else very soon, we won't be able to close in time to retain that low rate and will likely have to increase .5% or more.

Regardless of the interest rate issue, because this setback is right at the end of the month, we must now stay an extra 30 days in our apartment, as a full calendar month notice is required. If we DO close by Dec 4th on another property, I will be paying double rent/mortgage for a month.

What can we do?? Do we have a case for Rent + Inspection? Just Inspection? Nothing?

I'm lost.

 

[BL]

Gee . Maybe the home owner just wanted someone to pay for an inspection .

They could have backed out because repairs would cost too much .

Have you written them , the home owner and agent requesting reimbursement ?

Usually though an inspection is part of the process for the buyer , to insure they aren't being ripped off . It's really a small price to pay .

 

[shiver222]

Maybe the home owner just wanted someone to pay for an inspection . ** The home buyer never got to see the inspection itself. The only thing she learned from the inspection were the 3 main concerns, the most pressing being the upgrade of the electrical system for insurance reasons. (Her coverage was grandfathered)

They could have backed out because repairs would cost too much . **She did say they would cost too much, and that's why she wouldn't budge any lower on the price or agree to pay for repairs. At that time, we instead agreed to pay the repairs ourselves anyway and sent an electrician for a written estimate so we could finance it into the mortgage.

Have you written them , the home owner and agent requesting reimbursement ? **My agent addressed this to their agent, but nothing yet in writing. I wanted to feel out the situation here on the formus to see if I had a chance of winning in small claims first before threatening it in a letter.

Usually though an inspection is part of the process for the buyer, to insure they aren't being ripped off . It's really a small price to pay . ** I agree and that's why we opted to pay for the inspection. However, when the seller backs out this far into the process it is merely wasted money to learn about the potential defects of someone else's property. We'll never own it now, so why should we care? Remember, it wasn't us who made the decision not to buy after the inspection. Even after we offered to buy the property as-is,n then she backed out saying "Nevermind, I'm not ready to sell after all."

 

[CraigFL]

I think we need to know more about your offer to purchase contract. Typically, if you inspect, find defects and ask the seller to pay to correct and they refuse, the contract is void because it was contingent on an acceptable inspection or maybe other written terms. Therefore, if you were going to try to continue the contract you would need to both sign an exception addendum regarding that contingency or the seller would assume the contract was dead. Anything verbally would not hold up because it needs to be written for real estate deals.

 

[shiver222]

Thank you for your insight Craig.

After your explanation I went back to the text and read it again. I guess I wasn't interpreting it correctly but your explanation makes sense and -- unfortunately for me -- I think you are correct.

It states "if within 2 business days after [being notified of defects and proposed remedy] Buyer and Seller have not agreed in writing to a remedy of the identified defects, the Purchase Agreement is cancelled without further notice required. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement."

Oh well... on the plus side my real estate agent is a very good guy. He feels so bad about the entire fiasco during our first time home purchase and has agreed to pay the home inspection on the next property we select out of his own commission. I was just hoping to recover the funds and do right by paying him back.

As for the extra month notice... I guess I'm going to take a gamble and put in notice at my apartment with the assumption we will find another suitable property and close by Dec 1st. Hopefully my property mgmt company isn't competent enough to start renting my apt while still occupied (based on my last 4 years of residence, I think it's a safe enough bet). If I'm wrong we could be homeless for awhile.