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What did your contract say happens if a home inspection turns up some bad defect in the house? Did the buyer have the option to back out of the deal, or does the buyer always have to give the seller the chance to fix the problem? And who decides what constitutes an acceptable fix to the problem?
We are in 3 day attorney review period right now. Our attorney originally told us that we shouldn't change the inspection clause when we submitted the offer because it would make us look like pains in the butt, but we could change it when we went into attorney review. Now we are in attorney review and he is telling us he can ask for the changes, but it's not the "done thing" and he probably can't get the other side to agree to it. Are we really the only buyers in NJ who think it's a problem if a house is falling down and the sellers decide to "remediate" it with a hot glue gun?
I'm somewhat of a recent buyer (less than a year). First and foremost, there will always be a bit of 'buyer remorse' along the process. Here you are about to put tens of thousands of dollars in to a transaction that it isn't 100% transparent and with many middlemen along the way. I remember thinking"wow, they accepted the offer....and then minutes later...was my offer so high? what's wrong with the house?" So keep focused on the end game, which is to find a house that is proper for you /family. If you really think this is your home to be than it should be a fair transaction for both parties. Our lawyer placed plenty of legal jargon to allow us to back out of the deal if after inspection there were SEVERE issues that would not be addressed. The seller, in turn, has quite a bit of leverage after AR. That being said, I realized that the focus needs to be on really important things. A cracked window, not a bid deal in an old house for example. That's not a deal breaker. A buried oil tank, major problem. Foundation issues, major plumbing issues, roofing leaks, etc...major issues. Make sure you hire a proper home inspector who can diagnose a BIG issue from a small one.
Material defects are the only things that a seller is obligated to fix, unless you have something else in your contract. Material meaning, structural, the HVAC system, foundation, severe termite issues, etc. That is unless you agreed to an as is sale ... Its best to get everything in writing, even if it seems nit picky.
OK thank you for responding. The contract doesn't say anything about a right to re-inspect after they make a repair. Should that be in the contract? And should it say at what point in the process do we get to re-inspect? And should it say if we don't accept the repair, then what happens? What if they say the repair is adequate but our inspector disagrees? Does that need to be in the contract? I'm not sure the "If repairs exceed $X" would work, because what if the seller says they can do the repair for a two dollars and a handshake and we disagree? Who then gets to decide what the cost of the repair should actually be?
Anyway, isn't it the lawyer's job, not ours, to think of all these things? Our lawyer seems to be taking the attitude that we are just being nervous nelly first time homebuyers. We love the house and definitely want the deal to go through but not if it has a severe defect.
If you aren't happy with your attorney get a new one. But yes, their job is to protect you and answer your questions. Those are all valid concerns that should be addressed with more than "you are being nervous first time home buyers".
If you aren't happy with your attorney get a new one. But yes, their job is to protect you and answer your questions. Those are all valid concerns that should be addressed with more than "you are being nervous first time home buyers".
I agree with this. We were interested in a house with a decommissioned underground oil tank. Our agent was concerned but our lawyer REALLY laid it all out for us. He was also invaluable when we were considering a short sale and walked us through the issues and headaches. We walked on the short sale and it is currently still sitting under contract for over 10 months with someone else, a situation we didn't want to end up with and one he warned us about.
Your lawyers' job isn't to encourage you to jump into a house purchase or to diminish your concerns, his job is to protect you and your hundreds of thousands of $'s investment. He should answer your questions and explain the legalities and adjust the contract accordingly if necessary.
If you aren't happy with him, there are others out there. Make sure he/she specializes in real estate law and preferably is independent of others in the process.
Ugh, we are already 2 days into attorney review. Isn't it too late to switch lawyers at this point?
It's not too late, definitely. If you're not comfortable with your lawyer, then switch. And don't let your lawyer tell you that it's not "the done thing" to ask for changes to standard real estate contracts--it's done all the time (and I say this as a real estate lawyer, though I'm now a SAHM and not currently practicing) and most lawyers and realtors expect it.
FYI, the attorney review period can be more than 3 days--that's just the set amount of time that the contract provides, it can theoretically go on as long as the lawyers are going back and forth sorting out issues, as long as your lawyer has sent something to the other side saying that the contract is unacceptable in its current form (or the other side has sent your lawyer the same thing). If you really love the house in question but want to switch lawyers, do so quickly--while AR can last a long time, the seller can easily walk away during that time, so it's best not to let it drag on for no reason.
A reasonable inspection clause (assuming it's not an as-is sale) would allow you to walk for major issues, as a PP accurately described as mainly structural issues, radon, serious termite issues, that kind of thing. As far as setting a dollar amount, it's fine to say something like "$X according to estimates from licensed professionals specializing in the area in question", and not unreasonable to require multiple estimates for big-ticket items. This way, you don't need to rely on the seller's simply telling you an amount.
If there does turn out to me a major issue revealed during inspections, you can require the seller to repair, or you can ask for a credit to do the work yourself, as long as the contract specifies that. Requiring the seller to do the work means less hassle for you, but also somewhat less control, though you can be pretty specific as to your requirements for repairs by spelling them out in the contract. (A good RE lawyer should have standard language to use for these scenarios.) You can (and should) definitely reserve the right to re-inspect after the work is done and make sure it's done per the agreement. Alternatively, you can specify that you want a credit for anything found (the amount would still be determined by licensed pros, etc), so you can fix it yourself. The main trouble with that is that then it's on you--if it ends up costing more than the estimates for some reason, or the contractor performing the work becomes an issue, then it's your problem.
Good luck in the process, and feel free to ask questions. Though of course no one can give legal advice on a chat board, I'd be happy to give you any general info and my non-legal opinion on this stuff , having seen a ton of it.
Same answer as your other thread. Have your attorney put in the contract what you want in it. One thing you can put in is something like this:
"If repairs exceed $$XX, the buyer has the right to cancel the contract".
You also have the right to re-inspect the repairs. So while they can attempt to fix the house with a hot glue gun, you don't have to accept that.
Good post
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, having seen a ton of it.
