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Old 04-06-2008, 03:11 PM
 
15 posts, read 62,054 times
Reputation: 12

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My buyer wanted to put an offer on a house that was not furnished with property disclosures. He was willing to accept a $300.00 check at closing because of this. After inspection the house was not to his 100% satisfaction because it was raining out the day of inspection and we found water in the basement. I put a clause in the contract to protect my buyer and he is not bound by the purchase contract any longer. But my buyer wants his inspection money of $315.00 paid for by the sellers or listing agent because they failed to disclose the water issue in the basement to myself and my client.

Can my buyer client get this money back? This happened before with another client where the sellers just lied on the property disclosure and we were not able to get the inspection money back without paying expensive lawyer fees making it not worth it.

In this case the sellers rather pay $300.00 at closing and not fill the disclosures out.

I have read articles where lawyers advised clients to not fill out the property disclosure and simply pay a $300.00 fine to avoid costly law suits if a problem that was never an issue arise after closing.

but is there any chance my buyer will get his inspection money back?
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Old 04-06-2008, 05:27 PM
 
Location: Sacramento
60 posts, read 190,267 times
Reputation: 38
Quote:
Originally Posted by ProJuMp2001 View Post
but is there any chance my buyer will get his inspection money back?
Unlikely. The contract is typically contingent upon the Buyer's approval of the inspection results. Further, I assume the contract stipulated that the Buyer would pay for his own home inspection, and would bear the cost of any property investigation the Buyer deemed necessary.

The Buyer's investigation caused him to see the property was unsatisfactory. So he cancels the contract, there is no closing, and thus the sellers do not have to pay the $300 at closing. Look at it this way... the $315 for the inspection was money well spent, wasn't it?

Now here's what I'm curious about: Didn't your contract state that the Seller must provide certain disclosures? How was it that the sellers simply refused to provide disclosures? Unless the seller was a bank, that seems really odd... what state are you in?
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Old 04-06-2008, 05:54 PM
 
15 posts, read 62,054 times
Reputation: 12
Default I am in CT

The contract had a line that said in so many words, I have received the property condition disclosures but my buyer accepted that he was not going to receive the disclosures. and did not sign that part.

The sellers said they will just pay $300.00 I could not find out why, so I informed my client that we must assume the worst. I went on to say that it just doesn't sound right but that is just my opinion.

I did the comps on the subject property and it was selling for $30,000 lower then the houses in the area.

My client wanted something to fix up and he was willing to put an offer in contingent on 100% satisfactory of inspection.

I agree that my client is better off at a $300.00 loss then a 195,000 loss, and I told him the same. and told him that is the point of inspection.

He feels the listing agent should have informed him and myself of the possible termite problem that the inspector found and the water in the garage.

I asked for property disclosures before I put the offer in and I was told that the sellers are giving the listing agent a hard time with the second price reduction of 10,000 and that they are selling it as-is. I know that as-is does not relieve the sellers from disclosing material or latent defects.

So my client knew that the sellers chose not to disclose and because of that they would pay the $300 fine at closing. It was not misrepresentation because no one lied, It was failure to disclose but how can we prove that the seller knew about the problems.

I am advising my client to move on because it could cost more money to sue for the $300.00

before the offer I asked if their were any previous inspections on the property and the agent told me there has not been any inspections.
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Old 04-06-2008, 06:51 PM
 
Location: Sacramento
60 posts, read 190,267 times
Reputation: 38
Even if you can prove the seller knew about the problem I don't see how that would help your Buyer get his money back.

The Buyer apparently agreed to accept $300 at closing in lieu of receiving disclosures. There was no closing so he is not entitled to the $300.

Let's say you prove that misrepresentation took place, and an arbitrator or judge agrees that the sellers and their agent knew about the problem. What were your client's actual damages as a result of this misrepresentation? Likely, even the $315 for the inspection would not be awarded, since it is standard to obtain a home inspection even when disclosures are given.

In my opinion, as the Buyer's agent, you were extremely lucky to get out of this situation without being sued yourself. If your client had bought the property and then discovered the defect, do you know how easy it would be for him to file a complaint against you saying, "My agent let me buy the house without receiving the mandated disclosures!"

Yikes!
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Old 04-06-2008, 07:16 PM
 
Location: Columbia, SC
9,802 posts, read 19,290,756 times
Reputation: 8085
Why did you submit an offer w/o a disclosure statement in the first place? It is unlikely they can get their money back.I think Sacramentan's commnets are pretty accurate.

Are you a new or part time agent?
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Old 04-06-2008, 07:49 PM
 
15 posts, read 62,054 times
Reputation: 12
Default i am new

I just sold 1 house, i been doing this for 2 months.. My client wanted to buy the house without disclosures and get a 300.00 back at closing. Next time I will tell him to get another agent if he wants to do something like that. Now I know.. Thank you.
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Old 04-06-2008, 08:35 PM
 
Location: West End-Hartford
625 posts, read 1,870,045 times
Reputation: 377
Just to clarify, in the state of Connecticut, the seller DOES NOT have to provide property disclosures. If no disclosures are provided, the seller must pay the buyer $300 at the time of closing. It does raise a lot of questions why the seller would not complete the property disclosure report, but this is legal and part of the purchase contract and listing agreement in CT.
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Old 04-06-2008, 08:39 PM
 
Location: West End-Hartford
625 posts, read 1,870,045 times
Reputation: 377
ProJump- if you have questions like this, I would always advise you to ask your managing broker or a real estate attorney to clarify. Network with attorneys and send them business. They will be happy to answer your legal/contract questions here and there.
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Old 04-06-2008, 08:57 PM
 
8,755 posts, read 9,243,399 times
Reputation: 1429
In my state, the seller's disclosure is mandatory unless you are a FSBO or a mutli-family property. Why would the buyer think they should get the money back for the home inspection? The inspection did what it is supposed to do and saved them a lot of grief.
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Old 04-06-2008, 08:58 PM
 
69,360 posts, read 58,524,999 times
Reputation: 9372
Quote:
Originally Posted by ProJuMp2001 View Post
The contract had a line that said in so many words, I have received the property condition disclosures but my buyer accepted that he was not going to receive the disclosures. and did not sign that part.

The sellers said they will just pay $300.00 I could not find out why, so I informed my client that we must assume the worst. I went on to say that it just doesn't sound right but that is just my opinion.

I did the comps on the subject property and it was selling for $30,000 lower then the houses in the area.

My client wanted something to fix up and he was willing to put an offer in contingent on 100% satisfactory of inspection.

I agree that my client is better off at a $300.00 loss then a 195,000 loss, and I told him the same. and told him that is the point of inspection.

He feels the listing agent should have informed him and myself of the possible termite problem that the inspector found and the water in the garage.

I asked for property disclosures before I put the offer in and I was told that the sellers are giving the listing agent a hard time with the second price reduction of 10,000 and that they are selling it as-is. I know that as-is does not relieve the sellers from disclosing material or latent defects.

So my client knew that the sellers chose not to disclose and because of that they would pay the $300 fine at closing. It was not misrepresentation because no one lied, It was failure to disclose but how can we prove that the seller knew about the problems.

I am advising my client to move on because it could cost more money to sue for the $300.00

before the offer I asked if their were any previous inspections on the property and the agent told me there has not been any inspections.
Something missing here.. so here it goes.
Property selling for $30,000 less then comps..
Property being sold as-is..
Buyer paid for a home inspection.
Buyer wanted a fixer upper.
Home inspector found water in the basement.

Is water in the basement the ONLY reason they want to cancel the purchase, or were there other reasons? What was the cause of water in the basement? (bad downspouts and drainage might only cost $500-$1,000 to repair) If there were other reasons, but the total cost to repair is estimated under $30,000, then it sounds like the buyer, is not only getting what they want (i.e. a fixer uppper), but still getting a deal.

Whats the problem?
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