Misrepresentation of real estate property

3 Replies

Recently, my husband and I offered to purchase a house in our area.  This is not the first house we have purchased .  We actually already own ten rental properties.  This recent offer has been a nightmare from the get go.  I wanted to back out long ago but my husband didn't.  After the initial offer, we had a home inspection done which we agreed to pay for.  It was bad and alot of things needed fixing.  We withdrew our original offer and offered less to offset the repairs.  The seller accepted.  We then ordered the appraisal and the agent ordered the septic to be pumped and the roots cut out.  That was done.  Two weeks ago, the nightmare started after the appraisal and septic cleaning.  We went by the house and saw the seller had moved out and on the door was a foreclosure notice posted.  We immediately contacted our agent.  She assured us everything would be fine and it would close on time.  Today she called and said the seller was not the only one with an interest in the house .  His mother also had an interest in the house and was refusing to sell or to sign a quit claim deed.  At this point the house will probably not close and the deal is off.  I am more than livid as NONE of this information was ever given to us at any time.  We NEVER would have even put an offer in on the house had we have known any of these things. We feel we have been defrauded and I want my earnest money back plus I do not feel we should have to pay for any of the things we paid for.  The house was never free to be sold.  Do any of you have any ideas legally what are recourse is?  Thank you.

I think you would be able to get your earnest money back, but not sure about the septic and appraisal. Do you have a title contingency in your contract? I understand that every state has varying contracts. We typically ask for the title docs immediately which are reviewed within the first week after an executed contract. We then have a contingency to object after reviewing and therefore can recoup the earnest. This is all completed prior to appraisal. If the deadline is past then you need to find another avenue. Do you have any remaining contingencies in the contract? Does the seller have agent representation? I'm guessing the listing agent was blind sided as well and didn't order an O&E prior to putting it on the market? The listing agent will probably agree to releasing the earnest 100% your way.

You'll get your EMD back as there isn't an enforceable contract. Ask your broker about potential liability on the listing side... they probably don't even have a valid listing agreement.

If there is no listing agent that changes things. Pursuing a claim against someone who can't pay their mortgage is probably a waste of resources.

Thank you Hillary and Tom.  There was a listing agent.  This house had been on the market for a very long time with the same agent.  I have every reason to believe she knew it was in foreclosure.  She was a friend of the deceased father who owned the house and willed it to his son.  We live in a small town and so everyone knows everyone.  She may deny she didn't know but she would be lying. I have no idea how the son couldn't know that his mother had an interest in the house.  She lived there at one time.  I absolutely expect my earnest money back.  The foreclosure would have began long before we ever made an offer on it.  This should have been disclosed to us and wasn't.  The house not closing is in no way our fault as a buyer and completely the fault of the seller. Thanks for your responses but as I have had a day to think about this now, if I do not receive my money back, I will sue them.  This was fraud  plain and simple. In my opinion.

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