the right to cancel a real estate sale based on a home inspection

Discussion in 'Off Topic' started by Clocker, Jun 20, 2006.

  1. Clocker

    Clocker Golden Member

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    from a sellers viewpoint i was wondering if you can keep the earnest money if a buyer does not want to complete the sale based on the home inspection results.

    i do realize material defects should be fixed. but i am wondering to what extent stuff needs to be repaired. can a buyer cancel the sale and keep earnest money even if the faucet adapter in the kitchen slightly drips (once per every other hour)?

    does anyone know?
     
  2. EagleKeeper

    EagleKeeper Discussion Club Moderator<br>Elite Member
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    Depending on how the purchase offer is written.
     
  3. Number1

    Number1 Diamond Member

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    If you repair the defects, he has to buy the house.
     
  4. acemcmac

    acemcmac Lifer

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    I'd find you and kill you if I was the buyer. I was recently in a similar situation and we had problems with the foundation that the seller is balking at fixing/giving me the money for. I don't even think its possible for him to have gotten the 10k from escrow and run if I decided to bag it based on that, but if he did, he'd find himself floating in the river.
     
  5. SampSon

    SampSon Diamond Member

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    It usually depends on which state you live in. For the most part yes, a sales contract can be voided due to a home failing the inspection, even for the most trivial items.
    Typically in the contract the deposit on the house is "non-refundable", so you technically don't have to return the money. Though the party who backed out of the contract due to a failed home inspection can bring the other party to court over the deposit and easily win.
     
  6. z42

    z42 Senior member

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    Depends on the contract and the classification of the defects.

    If the contract says seller will pay for all things found in home inspection (this is rare) then he can cancel if you don't and get his money back. If it is a normal contract you will only have to pay for certain repairs and others will be the responsibility of the buyer. This language should be in the offer sheet/contract.
     
  7. jlee

    jlee Lifer

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    Afaik, the buyer can back out up until the closing paperwork has been signed. Unless that's just NH..

    Edit: Just realized that doesn't really answer the question. :eek:
     
  8. Clocker

    Clocker Golden Member

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    I am not talking about a foundation issue jerk i really am talking about a faucet that rarely leaks. i have fixed everyhting else. but i thought that issue was a bit trivial.

    Also, i was wondering if i can keep the earnest money if the buyer backs out
     
  9. Number1

    Number1 Diamond Member

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    Anny repairs donne as a result of the home inspection need to be satisfactory to the buyer. If the seller is unwilling to do the repair a new price can be negociated or the transaction can be cancelled with no penalty for the buyer.
     
  10. Clocker

    Clocker Golden Member

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    thanks for the responses i appreciate it.
     
  11. TechnoPro

    TechnoPro Golden Member

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    I've always seen cotracts written up with clauses that make the deal subject to the findings of a home inspection. The premise, of course, is that the buyer makes the offer based on what he can see through a walktrhough, but the home inspection might reveal issues that would present themselves as unfavorable in the eyes of the buyer. As for whether the seller must fix those, that is all up to the wording of the contract.
     
  12. NanoStuff

    NanoStuff Banned

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    That doesn't seem right. It should be the buyer's responsibility to run inspections on the house that they deem necessary, and anything defective that cannot be immediately inspected should be put into the contract to be paid by the seller.

    If the buyer didn't notice/ask about the condition of the faucet, sucks for them, keep the down payment. If the roof was caving it perhaps there'd be some room for discussion, but it's a leaky faucet for ******'s sake.
     
  13. TechnoPro

    TechnoPro Golden Member

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    The home inpection is designed to pick up on details that the buyer doesn't notice or ask about. That's the whole point.
     
  14. waggy

    waggy No Lifer

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    not many people know how to look for such stuff a home inspecter looks for.

    a leaky faucet can actually lead to major damage.

    I have always had any sale dependent on the inspection. I have cancelled one sale because the house had damage. No they did not get to keep any of the deposit.
     
  15. TechnoPro

    TechnoPro Golden Member

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    Out of curiosity, what damage did the house have?
     
  16. JulesMaximus

    JulesMaximus No Lifer

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    Bull fvcking sh!t. It isn't the buyer's responsibility to notice every defect when viewing a property. That is why there are home inspections. If the inspection turns up something fishy or even something the seller might not have been aware of the buyer has every right to demand that the seller either fix it or the buyer can walk from the deal.
     
  17. waggy

    waggy No Lifer

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    there was signs of flooding in the basement. I didnt notice (they had tried to covor it up) but the home inspection found it and let me know. also found signs of mold growing.

    pitty to. the house was nice had 2 barns in great shape
     
  18. Clocker

    Clocker Golden Member

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    There is absolutely no damage to the house. There is only a leaky faucet. I want to keep the earnest money since i have lost out in the buying season for my area. The buyer approached me before i listed. This process has been taking a while. I have passed ever single inspection radon, mold, structure, termites etc. The only repairs i have done were not really repairs. I updated an old water heater and removed debris in the attic. The leaky faucet and those other items that were listed were the only issues on the inspection report. Again i just thought it was a bit trivial for at most a 10.00 faucet valve. But it seems that i may also be arsed out in the earnest money.
     
  19. TechnoPro

    TechnoPro Golden Member

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    While I certainly empathize with you, what does the contract say? Earnest money wasn't just handed over with no paperwork... What does it say under the contingency that the home inspection turns up an issue that the buyer is not happy with?
     
  20. Clocker

    Clocker Golden Member

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    All the responses here certainly helped except for the person thereatening to kill me. it is a standard real estate contract for this state and it seems the buyer has the right to cancel. perhaps next time when i sell a home i will use or amend the real estate purchase agreement.

    thanks
    clocker
     
  21. Mursilis

    Mursilis Diamond Member

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    Sorry to hear you missed the prime selling season in your neighborhood. Next time, if you have a contract which is pending on contingencies (such as the home inspection) and not finalized, I'd continue to list the house, as long as you're upfront with other parties that a prior sales contract is pending. There's certainly no harm in continuing to show the property until a contract is closed.
     
  22. BreakApart

    BreakApart Golden Member

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    If the buyer doesn't notice the leaky faucet then there is almost nothing they can do afterward. Leaky faucet doesn't fall under undisclosed major/dangerous item.

    Guy at work didn't get an inspection, and he had to eat the cost of new siding soon after moving in. He purchased in fall/winter, but during the springs first rain storms he noticed mold being washed out from under the masonite siding, the previous owners knew about it, he's not getting a dime from the sellers. Really should have had an inspection, his own fault the siding was so soft it was amazing he missed it.

    Common house purchase goes something like this...
    -Buyer is shown property by agent
    -Buyer makes offer on property contingent on a home inspection. (some people don't do this which is stupid, simple $250 inspection can save you thousands)
    -Based on inspection: buyer can ask that items be fixed/replaced/etc (also ask for copies of the repair bills as proof)
    -Agent can handle making sure things were done and get the repair bill copies
    -Once all is fixed, buyer does another walk through to double check things the inspector pointed out the first time, and the reapired/fixed items.
    -Hopefully everything went well, and you move onto the real contracts

    My last house I had them fix/replace:
    -gas valve for water heater-replaced
    -furnace/water heater exhaust venting inspected/cleaned by HVAC tech (very poor exhaust venting, dirty/plugged)
    -well water test
     
  23. WildHorse

    WildHorse Diamond Member

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    I used a home inspection as a device to recover my deposit on a house I had started to buy, when I decided to back out of the deal after finding a much better deal elsewhere.

    Even though the inspector was professional and unbiased, w/o his report I would've had to forfeit my deposit. I told that inspector I wanted to know the absolute worst possible things about that house -things the seller couldn't easily fix (like the angle the land was graded on, etc).

    I did get my money back. Meantime, market was so hot that the seller found another buyer immediately, so he made out well too, and probably sold at a higher price than I had negotiated with him. Everybody ended up happy.