Major Defect or Real Estate Fraud?

[Amadbuyer]

We found a fsbo home in Ft. Wayne Indiana. We were given a disclosure form at the same time the offer (a board of realtors contract)was accepted. The home inspector found major defects including the main support beam being twisted and a large crack in the garage probabally from a footer problem and dormers inproperly placed on the roof and many other minor code violations. Then he showed us a report he did on the same house 3 years earlier. Those buyers released the report to the same seller we are dealing with and the buyers were given their earnest money back. The current disclosure dated by us after the date on the contract states nothing wrong with the property. Isn't this fraud on the sellers part? She told us she didnt know our inspector that the property was recent on the market and nothing is wrong with her 5 year old home. Also since it would cost nearly 10-30000 dollars to repair doesnt this efffect value and therefore become a major defect and isnt a support beam turned a major defect Shouldnt we ge our earnest deposit back at the very least? We feel weve been lied to and other things are wrong with the property as she nor her builder will provide us with building plans. Are we stuck as her lawyer claims or can we get out?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Amadbuyer:
We found a fsbo home in Ft. Wayne Indiana. We were given a disclosure form at the same time the offer (a board of realtors contract)was accepted. The home inspector found major defects including the main support beam being twisted and a large crack in the garage probabally from a footer problem and dormers inproperly placed on the roof and many other minor code violations. Then he showed us a report he did on the same house 3 years earlier. Those buyers released the report to the same seller we are dealing with and the buyers were given their earnest money back. The current disclosure dated by us after the date on the contract states nothing wrong with the property. Isn't this fraud on the sellers part? She told us she didnt know our inspector that the property was recent on the market and nothing is wrong with her 5 year old home. Also since it would cost nearly 10-30000 dollars to repair doesnt this efffect value and therefore become a major defect and isnt a support beam turned a major defect Shouldnt we ge our earnest deposit back at the very least? We feel weve been lied to and other things are wrong with the property as she nor her builder will provide us with building plans. Are we stuck as her lawyer claims or can we get out?<HR></BLOCKQUOTE>

You should not be stuck and should be entitled to cancel the contract and get your deposit back like the buyer before you. You need to hire an attorney to review the contract and explain to you the seller disclosure requirements that apply in your State of Indiana. You should have at the very least had an attorney review your purchase contract prior to your approval and acceptance. This is a clear and blatant case of misrepresentation by ommission of material facts. The Seller should have stated in her disclosure statement to you every condition that was noted in the home inspection report. The previous home inspection report is written evidence that the Seller was aware of the various property defects and conditions.

Whenever there are foundation, support beam and other structural concerns (dormers improperly constructed on the roof), these conditions are considered substantial material defects. The home inspectors' reports and the cost to correct the problems at between $10-30 K is a definite red flag.

The attorney representing the FSBO Seller should have told the Seller the truth and that she was wrong, instead of going along with an unethical act. Did the Seller's attorney write the purchase contract and review the disclosure statement? Did you actually talk to this attorney or did the Seller just tell you what her attorney said?

 

[Amadbuyer]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by HomeGuru:
You should not be stuck and should be entitled to cancel the contract and get your deposit back like the buyer before you. You need to hire an attorney to review the contract and explain to you the seller disclosure requirements that apply in your State of Indiana. You should have at the very least had an attorney review your purchase contract prior to your approval and acceptance. This is a clear and blatant case of misrepresentation by ommission of material facts. The Seller should have stated in her disclosure statement to you every condition that was noted in the home inspection report. The previous home inspection report is written evidence that the Seller was aware of the various property defects and conditions.

Whenever there are foundation, support beam and other structural concerns (dormers improperly constructed on the roof), these conditions are considered substantial material defects. The home inspectors' reports and the cost to correct the problems at between $10-30 K is a definite red flag.

The attorney representing the FSBO Seller should have told the Seller the truth and that she was wrong, instead of going along with an unethical act. Did the Seller's attorney write the purchase contract and review the disclosure statement? Did you actually talk to this attorney or did the Seller just tell you what her attorney said? <HR></BLOCKQUOTE>

HomeGuru: The seller told us her Lawyer Mr. Bloom, a real attorney, filled out the form which was a standard Board of Realtors Contract. We felt safe with that and proceeded without an attorney. Never Again!! After we found problems we ran to an attorney recommended by the Inspector. He sent a letter requesting repairs and said this was the first step in getting our earnest deposit back. There attorney replied that they felt they had not failed to disclose and that the house was fine and suggested a meeting. We sent back that we wanted our earnest plus expenses. They repllied with a new inspection report done by a retired city building inspector stating no major defects but agreeing that the main beam is 5/8" turned. We didn't know the house was being reinspected. We told our attorney we felt they had frauded us and we did not trust the house especially since they will not get us plans to the house showing footings. He is in the process of requesting our earnest deposit. He is suggesting it will take 2 years to take this to superior court. We don't have that kind of time or money. Does the 2nd inspection matter? What if our inspector is wrong even though he is sure he is not? Should we get a new attorney? Thank you for your promptness in this trying time for us.

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Amadbuyer:
HomeGuru: The seller told us her Lawyer Mr. Bloom, a real attorney, filled out the form which was a standard Board of Realtors Contract. We felt safe with that and proceeded without an attorney. Never Again!! After we found problems we ran to an attorney recommended by the Inspector. He sent a letter requesting repairs and said this was the first step in getting our earnest deposit back. There attorney replied that they felt they had not failed to disclose and that the house was fine and suggested a meeting. We sent back that we wanted our earnest plus expenses. They repllied with a new inspection report done by a retired city building inspector stating no major defects but agreeing that the main beam is 5/8" turned. We didn't know the house was being reinspected. We told our attorney we felt they had frauded us and we did not trust the house especially since they will not get us plans to the house showing footings. He is in the process of requesting our earnest deposit. He is suggesting it will take 2 years to take this to superior court. We don't have that kind of time or money. Does the 2nd inspection matter? What if our inspector is wrong even though he is sure he is not? Should we get a new attorney? Thank you for your promptness in this trying time for us. <HR></BLOCKQUOTE>

Dear Mad, your attorney needs to review the purchase contract to see what the contingencies were and the conditions for cancellation, such as your right to approve the results of the home inspection. The second inspection report does not matter if the purchase contract was written correctly to protect you as the buyer. If the fail safe language was in place, you could cancel for the very reasons that you have previously stated even if the Seller got 10 additional inspections completed. Another point is that if the Sellers failed to disclose those conditions, what else is wrong with the home that she is not disclosing. She already has a track record of not being tustworthy.

It is standard practice that Sellers only fill out the disclosure form and not attorneys and not even real estate agents. Since the Seller's attorney has not lived in the home, the disclosure statement was not filled out by someone with requisite knowledge of the conditions of the home. Information that only a Seller would have and know would be missing from the disclosure statement and therefore the statement may not be worth the paper it is written on. In this instance the Seller's attorney would be a defendant in any litigation for acting in the capacity of the Seller.

 

[Amadbuyer]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by HomeGuru:
Dear Mad, your attorney needs to review the purchase contract to see what the contingencies were and the conditions for cancellation, such as your right to approve the results of the home inspection. The second inspection report does not matter if the purchase contract was written correctly to protect you as the buyer. If the fail safe language was in place, you could cancel for the very reasons that you have previously stated even if the Seller got 10 additional inspections completed. Another point is that if the Sellers failed to disclose those conditions, what else is wrong with the home that she is not disclosing. She already has a track record of not being tustworthy.

It is standard practice that Sellers only fill out the disclosure form and not attorneys and not even real estate agents. Since the Seller's attorney has not lived in the home, the disclosure statement was not filled out by someone with requisite knowledge of the conditions of the home. Information that only a Seller would have and know would be missing from the disclosure statement and therefore the statement may not be worth the paper it is written on. In this instance the Seller's attorney would be a defendant in any litigation for acting in the capacity of the Seller.<HR></BLOCKQUOTE>

Homeguru: This standard form certainly doesn't protect the buyer or even treat him fairly. According to my lawyer I have to prove that the defect meets the definition of major default that is in the contract. To do this I must hire a structural engineer at nearly $1,000.00. I even got a second opinion and that attorney told me I'm certainly within the contract to receive the earnest deposit. He even agrees that we have a good case of real estate fraud. However, he says it will takes years to resolve and I'm better to settle. So we asked the seller for 2000. back they said they want 1250 and will give back the rest. It won't even cover our legal fees let alone banking fees appraisal fees, and of course an inspection fee. My question is where is the justice here? If I sign a release can I or they go to small claims court? Is real estate fraud a criminal act and can or should I contact the police or city prosecutor's office? I feel that getting an inspection should be a right of a buyer but obviously in Indiana it is meaningless. Thank you.

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by Amadbuyer:
Homeguru: This standard form certainly doesn't protect the buyer or even treat him fairly. According to my lawyer I have to prove that the defect meets the definition of major default that is in the contract. To do this I must hire a structural engineer at nearly $1,000.00. I even got a second opinion and that attorney told me I'm certainly within the contract to receive the earnest deposit. He even agrees that we have a good case of real estate fraud. However, he says it will takes years to resolve and I'm better to settle. So we asked the seller for 2000. back they said they want 1250 and will give back the rest. It won't even cover our legal fees let alone banking fees appraisal fees, and of course an inspection fee. My question is where is the justice here? If I sign a release can I or they go to small claims court? Is real estate fraud a criminal act and can or should I contact the police or city prosecutor's office? I feel that getting an inspection should be a right of a buyer but obviously in Indiana it is meaningless. Thank you.

<HR></BLOCKQUOTE>

Dear Mad, I understand your predicament and your situation just reinforces the fact that one should never sell or buy a home without a Realtor or an attorney. If there were Realtors involved you would have some recourse. Although you may feel that the Seller may have acted like a criminal, this is strictly a civil matter. If your home inspector is well qualified I do not agree that you need a structural engineer to prove you case. One alternative that I do not agree with but may speed things up is via alternative dispute resolution such as mediation or arbitration. The standard Realtor form should have a binding arbitration clause in it. Ask your attorney to review it and give you your options. I still feel that you should get your deposit back.