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Hi, this is my first post, so forgive me if I'm addressing something entirely acceptable within the realm of real estate protocol.
Our buyers signed the contract on 4/3/2010. They had our house inspected on 4/7/2010. The inspection noted that "The tiled floor has more than a typical amount of cracked/damaged tiles, you should have a specialist evaluate this." On the 7th or 8th, they brought in a "builder" friend of theirs to walk through the house and look at the cracked tile in our kitchen, which (incidentally) was noted on the disclosure forms we signed at the time we put our home on the market. This builder friend of theirs thought there was a hump in the kitchen floor as well and he decided that there were probably underlying structural issues involved--so he told the buyers to walk.
We never had a chance to negotiate repairs. The buyers' agent called our agent and told us they were walking out on the deal based on their friend's professional opinion. We then received a "Buyer Inspection Contingency Removal/Notification" that our agent told us to sign so the buyers could get out of the contract & get their earnest $$ back.
The thing is, there was nothing noted on the list of specified objections on the abovementioned form indicating that a professional opinion was involved in their decision to walk, nor was anything provided by the builder on paper: " ... buyers feel their [sic] might be some structural issues and they want to terminate the contract." Our agent promptly told us we needed to hire a structural engineer to check out the problem since this was something that would concern future buyers.
So we hired a structural engineer who, after a lengthy inspection, kindly informed us that there is absolutely nothing wrong with our house structurally. He is, as I type this post, completing a report that we will keep on file in the event this issue is brought up by future buyers.
My questions are as follows:
1) are we getting jerked around by our agent?
2) are the buyers legally entitled to a refund of their earnest money, given the fact that the reason for their termination of the contract is a non-issue?
It depends on what your contracts allow. Out here in Oregon the buyer can walk for any reason over an inspection report. So in your case, they could terminate and get their earnest money back, no problem.
Same in AZ. Buyer can cancel and get earnest money back during inspection period for any reason. No professional opinion needed, no negotiation required. Read your contract for your specific inspection terms.
Same in TX, they can terminate for any reason. Even if it's not related to the inspection - the wife has a headache, there are 2 cracked tiles, they met the neighbor and he's a jerk.
Your contract will tell you what they can do, if they can terminate let them go and get it back on the market ASAP.
The potential for foundation issues, real or not will make a buyer walk faster them any other issue. Just the talk about a bad foundation will cause a buyer to move on to the next house.
Did your engineer give you a clean report? Be sure and include it with your sellers disclosure.
It seems sellers need to keep the property on the market until the contingencies are removed. I know there is a method for backup offers but I think you lose a lot of potential buyers once it is listed with an offer.
Thanks for all the feedback. Very informative. We'll include the structural engineer's report with the other disclosure forms. We are also getting pricing for new flooring in the kitchen since that seems to be the issue that set off all the red flags for the previous buyers.
It seems sellers need to keep the property on the market until the contingencies are removed. I know there is a method for backup offers but I think you lose a lot of potential buyers once it is listed with an offer.
This does not fly in my area unless both parties agreed to it. And they do not when contingencies are routine.
To the OP: Buyers can and do ocassionally walk during the home inspection/ attorney review period in my area, too. There is nothing that precludes your agent from contacting the buyer's agent to make them aware that you brought in a structural engineer and have a report available, should the prior buyer be interested in reviewing it.
This does not fly in my area unless both parties agreed to it. And they do not when contingencies are routine.
To the OP: Buyers can and do ocassionally walk during the home inspection/ attorney review period in my area, too. There is nothing that precludes your agent from contacting the buyer's agent to make them aware that you brought in a structural engineer and have a report available, should the prior buyer be interested in reviewing it.
I was going to also suggest a call to the potential buyer to let them know that in fact there are no structural problems. They might be interested again. (but of course, their friend will lose some face)
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