Signed a purchase agreement...am I stuck?

Question

Hey BP:

I recently signed a PA to purchase a package of properties from a bank, where they would be financing the deal.  The deal is "as-is", but since my signing, there's been material changes to at least one of the properties, which is making me re-think the whole thing.  One change is that I received an email from the Agent that said they got word there was a" 'Water issue' happening at the property, where water was exiting one of the units (duplex), and the city turned off the water, but it appears the tenant disconnected the meter, and the pipes have frozen".  The property is not on a lockbox at this time, so I don't even know the extent of the damage.  They're supposed to give me access today or tomorrow, but they are unwilling to offer a concession for this extra damage.  There are other issues as well.  But my question is, if I decided to walk, what can they do?  I have not submitted a deposit either.

Thanks in advance for all input.

Still learning a great deal, and dealing with some serious growing pains right now, unfortunately :(.

Thanks,

Katrina

Wayne Brooks · Answer

No EM deposit yet.
No inspection contingency?
No "seller shall maintain in current condition"?
I can't see the bank coming after you if you walk, with an explanation letter.
They may then renovate.
Any other reasons you want to back out?

James H. · Answer

I'd have to know what the PA says, but it sounds pretty likely that you have grounds to walk away without violating the contract. I would look for the justification and then maybe renegotiate. You might be interested in the misprepresented property if the price is right...

Xing Zhu · Answer

First step is to assess the damage (maybe really nothing), and then
ask your agent to present your assessment together with the misrepresentation the bank made regarding the bedrooms to the bank to negotiate.

Katrina P. · Answer

Thanks, Wayne.  I'm not sure I want the other properties...still talking with the hubby about that one.  One major thing is that one of them were misrepresented (I was told there were 2 bedrooms in each side of duplex), but come to find out, the upstairs is a studio, and downstairs is a 1-bedroom.  This is a different property, btw.

Wayne Brooks · Answer

Since contract has the "maintain the property in it's present condition", you're legally covered on that property.  If they don't restore it to prior condition, or credit you for it, there's nothing they can do.  Do you want the rest of the properties, as per the contract?  I would think reason would prevail.  But, maybe not. You don't want the relationship if they're going to do this continually.

Katrina P. · Answer

Thanks for the replies, guys.  No, there are no inspection or other contingencies..I've waived them (stupido, I know).  Regarding seller maintaining the current condition, it states this:

"Possession: Seller will maintain the property in its present condition until the completion of the closing of the sale. Possession to be delivered to Buyer, subject to rights of present tenants. if any.
X At the completion of the closing of the sale."

So, if I walk, I know I'll lose the relationship, which sucks.  But I just don't know that I want to go through with this.  Can they sue me?  Or does the fact that one of the properties has not been "maintained in its present condition" excuse me?

John Mireles · Answer

What does your purchase contract say? Do you have a time period within which you may conduct your due diligence and opt out with no penalty? Are you within that contingency window?

Seems to me that since they don't have your money, they don't have a lot of power over you. Really though it all boils down to what's in your purchase contract.

Signed a purchase agreement...am I stuck?

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