Contract on houses

[deak17]

Is the seller entitled to keep my $1,000 deposit when a contract was made on a house, later to find out that the home was a manufactured home not advertised as this in Maryland. I found out this when the bank sent his appraiser to inspect the house. Other issues were a failed septic inspection that they would fix. The bank advised me that a new application process now had to be made. I advised the bank that I no long wished to proceed with the purchase and cancelled the contract. Later the seller said they wanted to proceed with the sale and take the deposit. Is this legal to take the deposit.

 

[quincy]

Is the seller entitled to keep my $1,000 deposit when a contract was made on a house, later to find out that the home was a manufactured home not advertised as this in Maryland. I found out this when the bank sent his appraiser to inspect the house. Other issues were a failed septic inspection that they would fix. The bank advised me that a new application process now had to be made. I advised the bank that I no long wished to proceed with the purchase and cancelled the contract. Later the seller said they wanted to proceed with the sale and take the deposit. Is this legal to take the deposit.

Did you have your own inspection of the house prior to your offer to purchase? Did you have any contingencies listed on your offer to purchase?

 

[deak17]

Did you have your own inspection of the house prior to your offer to purchase? Did you have any contingencies listed on your offer to purchase?

Yes on the inspection not advised on type of home and nothing written saying it was a manufactured, and no on contingencies.

 

[quincy]

You had an inspection prior to submitting the offer to purchase that did not inform you that the house was a manufactured home (and you were unable to see for yourself that it was a manufactured home), and you did not have the offer contingent on financing or satisfactory inspection and repairs?

It will depend on the exact terms of the contract you signed but you might have difficulty recovering your $1000 deposit if the seller tries to enforce the contract.

 

[Zigner]

Yes on the inspection not advised on type of home and nothing written saying it was a manufactured, and no on contingencies.

Did you not see pictures of the place? Did you not see videos of the place? Why would you even think of entering a purchase contract having seen NOTHING of the place?

Having said that...I don't believe you when you say the inspection didn't mention ANYTHING about the home being a manufactured home. Perhaps you didn't know what you were reading...but I'm confident that there was some indication in the inspection.

Based on what you've posted, it sounds to me like $1,000 is cheap for getting out of the contract.

 

[LdiJ]

Some manufactured homes do not look anything like what the ordinary person would expect a manufactured home to look like. They look like regular houses. While they are technically manufactured, they are actually build with the same materials that someone would use on a building site, its just that sections of them are built in a warehouse and assembled on the lot. They generally cannot be easily moved to another location. They are considered to be permanent once they are assembled on the foundation.

If the OP is talking about that kind of manufactured home, it would not be surprising for the OP not to have realized that it was manufactured. Some inspectors might not even catch that.

Both of my brothers are in construction and one of them worked for a company that made manufactured homes like that for a few years. I couldn't tell that they were manufactured just by looking at them.

 

[quincy]

A bank appraiser was able to see that the home was a manufactured home. A good home inspector probably should have been able to see this as well.

 

[Zigner]

To be fair - the bank didn't refuse to loan any money. The buyer simply decided not to purchase it. He should have built contingencies in to his contract to allow for this sort of thing, although I suspect the septic problem is more of a reason to back out.

 

[quincy]

I agree that the purchase agreement should have had contingencies. Common contingencies are offer is contingent on a satisfactory inspection and offer is contingent on buyer getting satisfactory financing and offer is contingent on sale of buyer’s current home.

The earnest money presented with an offer to purchase generally goes to the seller if the purchaser backs out of the sale. The seller often takes the house off the market after an offer to purchase has been accepted, potentially losing for the seller another buyer. It helps to compensate the seller for the loss of market time.

 

[LdiJ]

A bank appraiser was able to see that the home was a manufactured home. A good home inspector probably should have been able to see this as well.

Of course, but its still possible that an inspector could miss it. The ones that I am talking about really do not appear to be any different than a house that is fully built on site.

 

[quincy]

Doesn’t really matter here.

 

[LdiJ]

Doesn’t really matter here.

Actually it does matter. Everyone was pretty much assuming that it should have been obvious to the OP that the home was manufactured...and that it should have been obvious to others besides. The situation, and therefore the advice given should be a bit different once those who are most familiar with real estate law, are made aware that its possible that at least the OP might have had no reason to believe that the home was manufactured, and that possibly even an inspector could have missed it.

At this point I would normally recommend that the OP consult with a real estate attorney, but unfortunately the amount of the deposit/earnest money is small enough that it might not be cost effective to do so.

 

[quincy]

There is a signed purchase agreement with no contingencies.

 

[deak17]

Of course, but its still possible that an inspector could miss it. The ones that I am talking about really do not appear to be any different than a house that is fully built on site.

Precisely the agent missed it too.

 

[quincy]

Precisely the agent missed it too.

Unfortunately, I do not see that this helps you get a refund of the earnest money.

Did the seller provide you with a “disclaimer” form (essentially saying the house was being sold “as is”) or did the seller provide you with a “disclosure” that lists known house conditions? Many sellers will only provide disclaimers (noting only any known health or safety defects, like presence of lead paint).

You can ask for a refund, of course, but you may not get one.