Canceling a purchase agreement without an inspection
Member since 2020 · 41 posts · 8 votes
Canceling a purchase agreement without an inspection
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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
5y@Tralecia K Young
1) if the roof collapsed After you had an executed contract, most contracts require the seller to keep/maintain the property in the same condition until closing.
2) if the roof is now collapsed there is No way it qualifies for fha….just notify your lender, they’ll RE inspect, your loan will get denied, you get your EM back, end of story b
37 Replies
- 5yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
No one can make you waive the inspection. If you are not comfortable putting in an offer without an inspection, then don't be talked into it. If the house had water damage and it caused the roof to collapse, walk away. There should be a statement in your offer that said the house will be in similar condition as to when it was viewed.
- Member since 2020 · 41 posts · 8 votes5y
@Theresa Harris
She told me that’s the only way that I would be able to get a house during the market right now so she kind of persuaded me into doing that. I read the contract top to bottom and I don’t see anything that says that but I did notice that the house was vacant for sometime and the seller wasn’t as truthful on the property disclosure as he should have been.
- 5yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Originally posted by @Tralecia K Young:
@Theresa Harris
She told me that’s the only way that I would be able to get a house during the market right now so she kind of persuaded me into doing that. I read the contract top to bottom and I don’t see anything that says that but I did notice that the house was vacant for sometime and the seller wasn’t as truthful on the property disclosure as he should have been.
Talk to your lawyer. If the property disclosure has problems and the roof collapsed, even if you lose your deposit, you are better walking away. If you aren't comfortable with something, stand firm. This is a big purchase and you can always find another realtor.
- Member since 2020 · 41 posts · 8 votes5y
@Theresa Harris
I put down $5000.00 though that’s a lot of money to walk away from and I will consult with my lawyer because my contingency deadline for my mortgage is coming up.
- 5yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Originally posted by @Tralecia K Young:
@Theresa Harris
I put down $5000.00 though that’s a lot of money to walk away from and I will consult with my lawyer because my contingency deadline for my mortgage is coming up.
Talk to your mortgage company and let them know the roof caved in. That might make them change their mind. Still think big picture. $5K is a lot, but if you go through with the sale and lose $25K replacing the roof that is a lot more money.
- Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes5y
@Tralecia K Young
1) if the roof collapsed After you had an executed contract, most contracts require the seller to keep/maintain the property in the same condition until closing.
2) if the roof is now collapsed there is No way it qualifies for fha….just notify your lender, they’ll RE inspect, your loan will get denied, you get your EM back, end of story b - Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes5y
@Tralecia K Young It depends on how the contract is written. In my area, if the appraisal comes back and a "few things need to get fixed", it doesn't mean it passed the appraisal process. It just means it was inspected. Again, in my area, if a buyer gets tired of being in contract and want to walk aware, they lose earnest money. If a buyer can't get financing because of an appraisal issue, that is a different story.
A few years ago I was buying a property that also needed repair as identified during appraisal. Seller was unwilling to make repairs. Deal failed because I was not able to get financing because the appraisal had conditions on it that could not be completed. It was a saving grace in hindsight. When deal failed other Realtor made a play for commission. They only backed off after I contacted an attorney.
You are your own best advocate, so start asking questions of people that count like your lender, the manager of the brokerage, a lawyer, etc. Your agent is supposed to be on your side, but many are starving. It might be true that many offers in your area don't have inspection cont.
- Member since 2020 · 983 posts · 1k+ votes5y
Most sellers are not and brokers are not going to keep your $5,000 even though breached, or violated and signed agreements just because like you they don't want to get into a tizzy regarding legal issues. I've backed out of many signed agreements in my lifetime and all my deposit was returned.
The problem the seller has is; if the seller does not return your money then the escrow company has an obligation to keep the escrow open until issues regarding the $5,000 are settled. That means, the escrow cannot be closed and a new escrow cannot be opened for a new buyer until your issues about the $5,000 are settled and if someone decides to go through any lawyers or courts to settle the issue the property could be ties up for up to 5 years.
Nobody on this planet should be dumb enough to pay attorney $20,000 to $50,000 to argue about $5,000.
Just my street corner information and I could be totally wrong, but this is what I've personally experienced in the past. Make sure you give both a verbal and giving a written notice as soon as possible is very critical.
I don't know if it is smart to state your reasons for backing out because voicing your reasons only creates arguments arguments and reasons put in writing are something only an attorney should have knowledge about, even though this will never get to an attorney level. For example. When I evict a tenant I never give a reason (at least the laws allowed that in the past and now I don't know about the new laws) because when you give a tenant a reason now the tenant argues with you and can even be prepared to present the reasons you state when going to court. So, don't be so anxious to put the reason in writing.
"July 31, 2021
Dear Buyer's Agent:
At this time, I decided their are several issues and reasons I would like to back out of the purchase of this property.
Please refund my Earnest Money.
Thank you very much.
XXX XXXX"
- Member since 2020 · 983 posts · 1k+ votes5y
One more thing. Your broker or agent should be on your side even though he loses out on his commission because if he presses you with any b.s. and tells you that you should continue with the purchase then he is a scumbag interested in only his wallet, is not interested in your well-being and he should know there is no way you will do business with him in the future.
I had a 20-unit in escrow with a $50,000 deposit and my broker called me at 3 am in the morning screaming at me and he told me to back out of the deal because he was looking at the seller's records at 3 am in the morning and realized that the seller had recently rented a significant number of apartment units and did not get security deposits. The failure to get security deposits was a huge red flag because it showed both that the apartment recently had a significant number of vacancies and the seller was so desperate to fill the vacancies so the property looked more ideal the seller enticed tenants to move in by not asking for deposits.
I was seriously impressed to know that my broker was willing to give up his commission of about $50,000 to watch out for my best interest and my broker took a huge risk because I had no obligation to purchase a different property through him.
So, if your broker is a smart businessman he will watch your back and fight to get you back your $5,000 so you will do business with him in the future. There is no shame for backing out regardless of what your reason is.
- Real Estate Agent · Albuquerque, NM · Member since 2015 · 542 posts · 193 votes5y
If there were things that the appraiser said needed to be fixed, the appraiser will be making another visit to the property to assess those items before closing anyways. This means they will see the roof.
The appraiser will then make that a condition of repair to be fixed before closing as well, so either the seller will have to fix it or you won’t get the loan.
- 5yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
@Tralecia K Young first off, the market is not that hot that you have to remove an inspection contingency, that is the only one I keep in for my clients. The other two can be shadowed by an inspection contingency due to being able to back out due to any reason with the inspection contingency. Next time do not remove that inspection contingency or work with an agent that guides you differently.
The loan contingency is what you need to lean on, get with your lender and let the agent know that you want to cancel due to something along the lending side so that you have backing if the seller tries to be stubborn about the whole thing. First talk with your lender and your agent, and if you need more counseling that your agent is not providing I would go straight to their broker for better/more advice.
The McKernan Group4.957 Reviews - Member since 2020 · 41 posts · 8 votes5y
@Theresa Harris
Thank You so much for your input regarding my situation I really do appreciate it.
- Member since 2020 · 41 posts · 8 votes5y
@Wayne Brooks
Thank you so much for sharing your input regarding my situation. When conducting a reinspection for an appraisal do they use the same person or is it someone new?
- Member since 2020 · 41 posts · 8 votes5y
@Steve Milford
I just wanna start off by saying thank you for giving me all of the information pertaining to my situation. I will be reaching out to my lender as well as my realtor with these new findings so I know how to move going forward. I will all start time stamping things that I have sent to my real estate agent as well as my attorney in the form of emails so if I ever have to take a legal obligation I will have that to back my case up thank you
- Member since 2020 · 41 posts · 8 votes5y
@Jack Orthman
I would like to start off by saying thank you for all of the information you gave me pertaining to my situation. I will be taking these things into consideration when presenting this to my mortgage lender, my real estate agent, and my attorney. I will also start time stamping paperwork regarding me wanting to cancel my real estate purchase agreement contract from my initial conversation with my agent. I will also resend an informative letter to my mortgage lender letting them know that I have sent this request to my agent and I am waiting for the seller and my attorney to review the paperwork. I am also going to ask if they use the same person for the reinspection to pass for appraisal because if so, does he offer a full appraisal or is he just going back to check the things that didn’t pass the first time? I will be doing this because I want to make sure I am taking the proper steps into getting my earnest money back based off of the steps that I am going to be taking going forward.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes5y
You need to take responsibility for yourself. Your realtor didn't "make you" do anything. YOU didn't include an inspection contingency in your contract. That said, the contract should have some language about the house being in it's present condition at closing.
- Investor · Melbourne, FL · Member since 2017 · 159 posts · 116 votes5y
As had been said earlier. Every house contact I have viewed has a clause stating that house must be in the same condition as closing as when the contract was signed. If the roof collapsed after the contract was signed, either the owner must repair, negotiate or cancel the contract, depending on the contract's wording. Your agent should be aware of this very basic condition of the contract. If not, immediately talk to your agent's broker. There should not be an issue getting out of the contract.
I once had a contract on a house when a hurricane damaged the house. My agent (first and only time using him) insisted that the owners were only going to repair a portion of the damage and were not responsible. A less experienced buyer probably would have believed the agent and lost out.
- Member since 2020 · 41 posts · 8 votes5y
@Eric James
Well technically I had a professional advise me during this transaction so she persuaded me to do that in order for me to get the house. So I went off of a person that I trusted that has knowledge that went to school as well as got their license to help me purchase a house. But then again nowadays people are out just looking for commission versus having the best interest for the client.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes5y
Originally posted by @Tralecia K Young:
@Eric James
Well technically I had a professional advise me during this transaction so she persuaded me to do that in order for me to get the house. So I went off of a person that I trusted that has knowledge that went to school as well as got their license to help me purchase a house. But then again nowadays people are out just looking for commission versus having the best interest for the client.
....and, you still won't accept responsibility.
- 5yPaul DefnginPro MemberLender · Rockville, MD · Member since 2008 · 498 posts · 199 votes
@Tralecia K Young that is a terrible realtor, looking out for her own commission. Seriously?
Don’t say anything about the roof because it appraised?!? Come on. Maybe she would like to pay for it himself/herself, when you own the house and can’t live in it because it’s pouring water in! It’s terrible advice, and the consequences is that - you, will be the one holding the bag, as they say.
Get your money back and fire this realtor!
- 5yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Originally posted by @Tralecia K Young:
I recently just viewed a property that I was interested in and made an offer and my offer was excepted. My realtor made me waive my inspection due to the market being so competitive. I have a mortgage contingency as well as a dream buyers grant contingency and a I have to cover up to $2500 worth of FHA repairs. The house got appraised and it came back with some things that need to be fixed. I later went back to the property and the property suffered water damage causing the roof to cave-in. My realtor said that I can't say anything about the roof because the roof passed the appraisal inspection. I no longer want to be in contract with the house and would like my earnest deposit back. How do I go about getting that back?
You've received some really good responses already. I didn't see anyone reply to what I'm about to say, but I breezed thru some of the replies. You mentioned you agreed to $2500 in FHA repairs. Look sister a caving in roof Is more than $2500 repairs typically. Get one of the big dog contractors to give you an estimate to fix it. It should definitely be more than $2500.
- Rental Property Investor · Chicago and mainly invests in KS remotely · Member since 2018 · 360 posts · 314 votes5y
You are still under financing contingency? Let your lender know that the roof caved in,take pictures, maybe they won't fund the house unless that was fixed, since conventional loans have so many contingencies, and you might be off the hook.
- Member since 2020 · 41 posts · 8 votes5y
@Lydia S.
Thank you so much for providing me with a clear state of mind and I hope my lender let the appraiser know about that before hand because it’s more of a sunken roof versus a clasped roof due to water damage.
- Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes5y
@Tralecia K Young smoke and mirrors. And realtors think they know the laws when they don’t.
This is why people do walkthroughs right before close. You agreed to the house as is not one with a (subsequently) collapsed roof. Seller can’t deliver the promised product, bank won’t lend on it. And if you tried to go through with it without informing the bank it would be fraud.
They are blowhards pure and simple. Any hint of issues send a demand letter for return of EM from a lawyer not a realtor. Cost maybe $200 bucks. You probably just have to get in touch with the broker who manages the agent though.
- Member since 2020 · 41 posts · 8 votes5y
@Eric James
I did take responsibility now I’m here trying to fix it but thank you for your input. It’s a life learning lesson it happened and now it’s time to move on.I’m going to except whatever outcome it is but in the meantime going to see what I can do to get it remedied the best way.
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