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I am looking for inputs from knowledgable people on this forum on my situation. Here's how it goes....
Our offer on a home gets accepted and we perform home inspection and termite inspection during due diligence period. Buyer agreed to meet midway to fix/repair items discovered during inspection. Now, one week away from closing when my loan approval process is underway, my insurance agent reveals that there was water damage to the house and asks for additional document to ensure that the home is insurable before I purchase homeowners insurance. This incident was not disclosed in the sellers disclosure. Seller claims they forgot to mention it as this was used as a rental property, when even the neighbors remember that furniture and carpet were pulled out of the house for the repairs. Sellers send receipts of repairs and insurance claims and say the issue was fixed. There is a discrepancy in the amounts that my insurance agent is showing as water damage claims and that the seller is providing.
We did not feel comfortable with non-disclosure of the damage and the way the repairs were done (we visited the property again after new disclosure) and took the seller's offer to back out. Now they are saying that they will not return the EMD because we are backing out after the due diligence period, whereas the new disclosure came in much after the due diligence had expired.
Our expenses on the home to date:
Home inspection $350
Appraisal $475
I am not sure if my lender running my credit report will impact my credit score- it was upwards of 800.
What are my options? Does the sellers claim hold water? Please advise.
You might get your EMD refunded (no guarantee), but not likely the home inspection or appraisal fees due to the seller's non-disclosure. Best of luck to you.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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If you have a loan contingency in your contract and your lender insists on having those questions answered before they make the loan, you should be entitled to get your EMD back. running an isolated credit report isn't going to do much to your credit score.
Now they are saying that they will not return the EMD because we are backing out after the due diligence period, whereas the new disclosure came in much after the due diligence had expired
A strongly worded letter from a local lawyer ($50) may change their mind to give back the earnest money deposit. If not, see you in court!
A strongly worded letter from a local lawyer ($50) may change their mind to give back the earnest money deposit. If not, see you in court!
Agreed 100% !!
Clearly the seller neglected to report vital information that may have prevented you from even making your offer at the same price. Technically, the seller could be liable for their non-disclosure (not a legal opinion, just my personal opinion).
Yes about the lawyer. A suit would hold up a sale for those sellers. You can mention suing for fraud. You might pop over to the neighbor's house and have them sign something about what they saw. Note dates of seller's statements about the water in the basement. Any preparations you made...sold a home you were moving from? gave notice on a rental?
Yes about the lawyer. A suit would hold up a sale for those sellers. You can mention suing for fraud. You might pop over to the neighbor's house and have them sign something about what they saw. Note dates of seller's statements about the water in the basement. Any preparations you made...sold a home you were moving from? gave notice on a rental?
The lawyer would be best.
Alternative is small claims court.
In fact, when I first communicated with my agent about the water damage claim, the listing agent wrote back saying she remembered the owner mentioning something about it briefly, but would check with them and get back to us. Well, if the owner/listing agent knew anything about the water damage, then aren't they obligated to disclose it in the seller's disclosure? This would have prevented us from either making an offer on the home in the first place or lowered our offer price to cover for any repairs/redo arising from it.
I do not think they have a case for holding our EMD, but it hurts to know that we spent close to a thousand dollars unnecessarily.
I do not think they have a case for holding our EMD, but it hurts to know that we spent close to a thousand dollars unnecessarily.
Home inspection $350
Appraisal $475
For $50 or so dollars, you could take your chances in small claims court. In my opinion, the $825 in expenses could easily be recovered. Its up to you if its worth your time and hassle to go to court.
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