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I have a house for sale and got a contract about a month ago. The buyer's put down $1000 in earnest money with a $3500 repair contingency. 3 weeks later they asked for a release of contract and return on the money, because of their inspection. I didn't receive a copy of the inspection or a single quote for repairs until a week later. First, of all, the buyer's never asked for the repairs to be made, they just wanted out. Secondly, the inspection report said the roof was at the end of its useful life. I had two licensed roofers inspect the roof and both estimated the life of the roof to have 5 - 8 years remaining. I did have some flashing repaired for $200. Then, the buyer's presented me with a foundation quote of $4200 to replace wood supports with masonry supports. I had three licensed general contractors inspect the house and quote repairs. They advised NC code allowed the wood supports and all three suggested pouring permanent concrete footers. I had the work completed for $1100. Finally, they gave me another quote for $724 to repair a loose toilet, replace 3 baseboards (which in my opinion, is not a repair, it's cosmetic), and fix a sticking door. None of which are on the inspection report. I finally signed a release of contract, but not a release of earnet money. They never tried to negotiate the repairs, and the costs of repairs they presented were crazy high. Now they are taking me to small claims court to retrieve the money. Should I not get to keep the money???
If the sale was contingent on them getting an inspection and they got one and didn't like what it said, I think they are allowed to get out. What does your contract say exactly about inspections? I know whenever I've had an inspection, a dollar amount has been put on the inspection contingency. Usually, it was $1,000.....because I wasn't buying any fixers and expected the house to be in good order. If my inspection results said there was more than $1,000 in repairs, I could get out of the contract if I wanted to. So, under those cirumstances, I would get my earnest money back.
You have to read your contract to see what it says EXACTLY about inspections and if your buyer can be released from the contract and what happens to the earnest money.
One more thing to consider...if I was still trying to sell my house and my buyer was gone, I wouldn't want to be involved in any lawsuits. It could scare other buyers away if they found out.
Not an expert here but I would think it depends on what the contract says. It probably is contingent on a satisfactory inspection. Which is very subjective. If the buyers aren't happy with the inspection then they have a right to back out and get the money.
I have bought twice and sold once in Texas. I (when I was buying)and my buyer (when I was selling) put down an extra 50 dollars for an option period which gave us the right to change our mind for any reason within 7 days. We would loose the 50 dollars but get our ernest money back.
Even if you are in the right (which I don't think you are), it might not be worth it to battle it out in court if you are trying to sell a house right now. Those court cases are a matter of public record. Someone buying from you might stumble upon your court case if they are very deligent in their research. They might be afraid of go under contract with you if you know about your case.
Would it have been worth it to offer some kind of concession to the buyer? Like maybe offer then a few K off the selling price if they go ahead an buy from you rather than breaking the contract?
Good luck!
Quote:
Originally Posted by justwanttosell
I have a house for sale and got a contract about a month ago. The buyer's put down $1000 in earnest money with a $3500 repair contingency. 3 weeks later they asked for a release of contract and return on the money, because of their inspection. I didn't receive a copy of the inspection or a single quote for repairs until a week later. First, of all, the buyer's never asked for the repairs to be made, they just wanted out. Secondly, the inspection report said the roof was at the end of its useful life. I had two licensed roofers inspect the roof and both estimated the life of the roof to have 5 - 8 years remaining. I did have some flashing repaired for $200. Then, the buyer's presented me with a foundation quote of $4200 to replace wood supports with masonry supports. I had three licensed general contractors inspect the house and quote repairs. They advised NC code allowed the wood supports and all three suggested pouring permanent concrete footers. I had the work completed for $1100. Finally, they gave me another quote for $724 to repair a loose toilet, replace 3 baseboards (which in my opinion, is not a repair, it's cosmetic), and fix a sticking door. None of which are on the inspection report. I finally signed a release of contract, but not a release of earnet money. They never tried to negotiate the repairs, and the costs of repairs they presented were crazy high. Now they are taking me to small claims court to retrieve the money. Should I not get to keep the money???
I have a house for sale and got a contract about a month ago. The buyer's put down $1000 in earnest money with a $3500 repair contingency. 3 weeks later they asked for a release of contract and return on the money, because of their inspection. I didn't receive a copy of the inspection or a single quote for repairs until a week later. First, of all, the buyer's never asked for the repairs to be made, they just wanted out. Secondly, the inspection report said the roof was at the end of its useful life. I had two licensed roofers inspect the roof and both estimated the life of the roof to have 5 - 8 years remaining. I did have some flashing repaired for $200. Then, the buyer's presented me with a foundation quote of $4200 to replace wood supports with masonry supports. I had three licensed general contractors inspect the house and quote repairs. They advised NC code allowed the wood supports and all three suggested pouring permanent concrete footers. I had the work completed for $1100. Finally, they gave me another quote for $724 to repair a loose toilet, replace 3 baseboards (which in my opinion, is not a repair, it's cosmetic), and fix a sticking door. None of which are on the inspection report. I finally signed a release of contract, but not a release of earnet money. They never tried to negotiate the repairs, and the costs of repairs they presented were crazy high. Now they are taking me to small claims court to retrieve the money. Should I not get to keep the money???
Go to small claims court. It is a court of equity and the judge may come up with some fair solution.
As others have noted it depends on what your contract says. But normally some i dotting and t crossing is required. A formal request to fix things. Or supplying a copy of the inspection report.
The only money you have at risk is the court costs...and you might get it all or at least a split.
You might also call them and offer a split. Note though that they will mention it in court. So you suggest a split let them suggest the amounts...
Like others have said, it DOES depend on what it says in the contract.
While you may not like what the inspector said, the fact that you did repairs tells me there WAS something wrong.
Many times the contract say "satisfactory home inspection" with no definition of satisfactory. Contracts do not always require the buyer to give the seller the report - but sometimes they do. Sometimes it's just the part of the report where their objections are.
I'm not sure why you feel entitled to their earnest money. They made an offer contingent on their inspection, the inspection turned up things they were not happy with, and they decided they no longer wanted to buy your house. Unless their contract said the money was not refundable, I don't see how you can decide to keep it. But then, I'm not a Realtor or an Attorney.
Like others have said, it DOES depend on what it says in the contract.
While you may not like what the inspector said, the fact that you did repairs tells me there WAS something wrong.
Many times the contract say "satisfactory home inspection" with no definition of satisfactory. Contracts do not always require the buyer to give the seller the report - but sometimes they do. Sometimes it's just the part of the report where their objections are.
I'm not sure why you feel entitled to their earnest money. They made an offer contingent on their inspection, the inspection turned up things they were not happy with, and they decided they no longer wanted to buy your house. Unless their contract said the money was not refundable, I don't see how you can decide to keep it. But then, I'm not a Realtor or an Attorney.
Hey true in a way...but then again we have an opinion that a roof is end of life...which I find hard to believe (not that the roof was end of life but that one of you guys wrote that down...every one I have seen would have said something about roof appear in need of an assessment by a licensed contractor)
And we have a set of complaints that are not in the inspection report. And we have an acceptable condition that the owner fixed anyway...
Sounds to me like a fun thing for a little litigation. Judge is gonna split the baby on this one.
The only ones that would win in this lawsuit would be the atty's. I think a good term would be "cutting off your nose to spite your face".
I have written many times that a roof was NEAR the end of it's useful life. I have even said it was at the end. Since the report was not posted here to see the exact wording, and we can't see the roof - we just don't know.
Just for the record, when I see a roof that needs repairs of some sort, I report that the roof NEEDS repair, and a licensed roofer should do it. They don't need to do an assessment, I already have. I think it's a weak inspector that calls out for everything to be "assessed" by one expert or another. That's what we are being paid to do, inspect and give an opinion on the condition. Sorry for the thread drift.
I think it's a sad state of affairs when people are so quick to jump and play the "I'm gonna sue you!" card. Sometimes it just doesn't make sense, and this is one of those times.
Hopefully you have a good local agent that knows your contracts. This is one of the big reasons we exist, to hopefully prevent disagreements & lawsuits.
Best of luck
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