Breech of Contract?

[ljbatkinson]

What is the name of your state?What is the name of your state?Maryland
We signed a contract for a home in MD. The inspection found evidence of termite damage. The contract states that the seller shall fix the damage from prior infestation and treat for current termites. The seller wants to put $3000.
in escrow for all problems found by inspection. The estimate for the termite damage is $2800.-$3600. We still want to purchase the house. Is this a breech of contract on the seller? What are our rights? We believe she want us to back out so she can put the house back on the market for more money.
Thanks,
ljbatkinson

 

[HomeGuru]

What is the name of your state?What is the name of your state?Maryland
We signed a contract for a home in MD. The inspection found evidence of termite damage. The contract states that the seller shall fix the damage from prior infestation and treat for current termites. The seller wants to put $3000.
in escrow for all problems found by inspection. The estimate for the termite damage is $2800.-$3600. We still want to purchase the house. Is this a breech of contract on the seller? What are our rights? We believe she want us to back out so she can put the house back on the market for more money.
Thanks,
ljbatkinson

**A: no it is not breach of contract since the $3K falls withing the range of the termite repair estimate. You do not have to accept the estimate and could hire your own contractor to provide another estimate. Also. what is the cost for the treatment as that also must be figured in the total.

 

[ljbatkinson]

The cost of the termite tx. is 700.-900. I'm confused because the contract states that the seller should fix the damage before, we occupy the home. Also, the lender will refuse the loan if the damage is not repaired prior to settlement.ljbatkinson.

 

[Orcons]

You have a contract that states that some set of things found by the inspection must be fixed by the seller prior to closing. One of these things is termite damage, you don't tell us any others.

Escrow would be used if for some reason the seller could not fix the items prior to closing (say couldn't schedule contractor or something like that.) You have to agree to the escrow though so it is not a breech of contract for the seller to propose it.

Now, where you need to be careful is in setting the amount of the escrow (assuming your lender will go along and you are willing.) It sounds like the seller wants to set aside $3K for everything when you already know the termite damage alone may be more than that. You need the escrow amount to be greater than what you think all the costs will be. If it costs less than the escrowed amount the seller will get the excess back. If it costs more than the escrowed amount you will have to go after the seller for the extra which is what you want to avoid.