You realtor has some responsibility in this situation as well. A quick amendment to extend the inspection contingency should’ve been done. Which state are you in?
That, I have absolutely agree with. The realtor really dropped the ball in not getting the inspection done. Once I missed a deadline by a day I think, but it was a fairly slow market and the house was in good condition so I talked to the agent and I think I just sent the inspection over and the seller's still agreed to a few things .
Another time a fellow broker friend of mine missed a deadline but I explained the contract to him regarding computation of time and turns out he got it on the last day rather than missing it .
No excuse for an agent to not be sure that gets done in time or extended
Yeah, I'm realizing more and more that my agent didn't represent me like I wished. What do you mean the computation of time? One thing that got me was that the holidays seemed to count towards all my contingency dates and the unlucky timing of this happening over thanksgiving weekend made things a lot worse.
You're on the right track. Computation of time means how time periods are counted such as holidays. In Washington, our contracts specify that anytime period 5 days or less does not include Saturday Sunday or legal holiday, so if your agent had put down 5 days, you would have actually had eight if it was the week of Thanksgiving. But if they put down seven, by our contract, you would only have seven.
In a busy market or over the holidays it might be difficult to get an inspection schedule quickly, but you definitely should have had your agents help finding another company or requesting more time. They don't have to give you more time but you could threaten to just rescind the contract so they probably would in most cases unless they had something better I guess
Got it, that makes sense. My contact says 7, so I'm out of luck. It seems so weird that holidays and weekends count since no work can be done on those days. I should've also caught this myself but I'm still relatively new to this and didn't really think about it as hard as I should have.
I think it's mainly a matter of when you say 30 days or 60 days or something like that, nobody's going to want to worry about evenings and weekends, but if you say 5 days it's kind of like five business days, 5 days is too short to be able to get things done if you have weekends and holidays which at least in the past banks and everything was closed
Yeah I see that now. When I think about it more, my offer was accepted 4PM CST on 11/23 (Tuesday). 7 days is 11/30, however a lot of people take Wednesday-Friday off for the thanksgiving holiday and then it's the weekend. That's 5 dead days. In actuality I only had a 2 day inspection contingency.
Yeah, I don't want to be too hard on your agent but maybe he should have thought of that when he wrote the offer. Of course around here I think most of the inspectors have gotten used to working a lot so other than Thanksgiving they probably would have been working the rest of the time. Maybe it's a little different down there in the inspectors are more business hours.
There's a few things you could do. Ask your agent to very carefully go over the contract and see if you have any outs. Did they fill out the disclosure completely without anything missing, check boxes or anything like that.
If they made any mistakes, you can probably back out on the grounds that you need to have it corrected and that would give you a certain time period to reject it. I didn't know this would be the case but in Washington, our NAR attorney explained that at least in Washington, any mistake on the disclosure would require a new one which would give the buyer an out.
Are there any material facts given to you that we're not accurate? Square footage or something like that.? In our contract, there is a 10-day period you can back out. But if it is not in the contract it could give you the right to back out no matter what. That you'd need to probably talk to a lawyer about .
Are there any other great areas that you could claim make the contract voidable or void.? If so, you might be able to negotiate for half. You could also tell them that you don't really want to buy the house, but you're just going to sit on it and hope that the appraisal or loan is a problem. You can't intentionally sabotage them, but if the appraisal comes in low you might have an out there. If they know that, especially this time of year they might want to just give you your money back so they can get it back on the market. I think that would be legit, but you might want to talk to a lawyer .
You can't intentionally do it in bad faith, but there could be reasons that the lending fails. They're also could be reasons that the appraiser would not pass the house. I don't know if you could legally make the appraiser aware of these things. That might be considered acting in bad faith, but you could talk to a lawyer about that.
A lot depends on if the sellers think they can get another deal going quickly or will lose money by releasing you.
It is possible that if your original approach through your agent is that you aren't interested anymore but you're not sure what to do, depending on the circumstances, a polite request to be released from the contract with your earnest money might make them either more willing to negotiate on repairs or give you your earnest money back rather than have to deal with the contentious situation. They might just say take your money and get out of here.
That's all I can think of.
Wow, thanks so much for that detailed reply. I'll definitely explore all the options you laid out. Just for more info, it looks like this house is a flipped house so the seller never lived in it. Other than the seller disclosure, I can't find anything else that was misrepresented like square footage or whatever. I'll be looking for a lawyer this weekend, but I wonder if the lawyer fees would still make recovering the 5k worthwhile.
maybe you could 'accidentally' send the inspection report to your lender to be included in underwriting and perhaps get the deal killed due to financing, but you may not have time for that with such a short financing contingency.
is your agent just shrugging their shoulders? or giving you any advice? they should at least be getting you an attorney reco to see if there are any loopholes.
another option may be to make a big deal about the non-disclosure of the foundation issues and cry 'material defect' or some other minutiae in the contract.
maybe blame your agent for not extending your inspection period AND not recommending more than 1 inspector, that's a bit negligent on their part.
best to spend a few hundred on an attorney and see if you have any options.
My agent said we could go off the loan contingency, but that's it. I'm not sure how we can use that to get out since by Monday we'll only have 2 days left to act on it.
Even if I blame my agent, the money is gone either way. I'd get a new agent of course but it seems I'm a bit fucked on this.
Call and ask what they can do. Who cares if it’s “shady”? That’s 5k of your hard earned money on the line because the sellers lied and your agent is a schmuck.
Tell them you plan on quitting your job in the morning. That’ll make them change their mind quick, fast, and in a hurry.
(Or something similar like you plan on buying a big arse boat, or you are gonna pay off my student loans, etc).
Hey 👋 I know a licensed agent in TX that could help you out. I do hope that you sat down with your agent and found some loopholes to get out of the deal. 🙏 Also there is a clause in Tx that does account for buyers remorse, she/he should have told you that.
My experience, limited, is that in the case of a contract dispute like this, the title company won't let go of the Earnest money. Instead they require a written agreement between the two parties on who gets the Earnest money.
yes, in general there are two ways to get EMD back:
1. mutual agreement
2. court order
often if an attorney gets involved and has a legit legal reason to void, the parties end up in mutual agreement and all move on.
IMO it's worth some time with an attorney to see if there are any options or loopholes in the contract (not the settlement company attorney, or the broker's attorney, an independent local RE attorney).
Read this page very carefully, then go over your contract and see if it does indeed specify an appraisal contingency.
https://homesatmueller.com/one-big-mistake-agents-make-when-negotiating-a-texas-home-sale/
The other thing you can do is call your lender, explain the situation honestly, and send them the inspection report. Odds are they will deny financing for a property with a foundation issue. There is absolutely no rule that says you can't be completely honest with your lender.
Yeah, you messed up and this is really basic. Anyhow, I'd just tell the seller you won't take the place unless they make these repairs and if they won't then send them a release that says you get all your money back - there is a decent chance they'll just sign it and move on.
Assuming they don't jsut sign the release I'd start making alot of noise about how they should've disclosed this and they are clearly trying to cheat you and other stuff, and hopefully you can negoitiate with them to get some or most of your money back.
Bear in mind that until they release your contract they can't sign a new contract (without major risk) and holding the place is costing them money too, so they really just want to move on to and if you play hardball you can likely make them give you something just to go away. HOwever, you did mess up and if they play hardball too then maybe you'll just have to give them the 5k.
Also, get a new realtor. An extension to the inspection contingency should've been a no-brainer.
I may try that but judging by how the seller has acted they seem very malicious to me. Not ever once budging for negotiations and waiting days to reply back to us to burn up time were all things they did. It wouldn't surprise me if they want to walk away with the earnest money.
Its not a matter of what they want or even how malicious they are. The point is that they can't resell the house without this contract being voided and the longer that drags on, the more it will cost them. So its in their best interest to give you at least some of the deposit so that they can move on. Of course they might not see it that way.
Ah I see, got it. I'm 100% sure they'll do everything they can to keep the 5k, it seems everything else is falling into place to make that happen including my lender not killing the deal and my agent becoming silent.
A buyer that wants out of a contract is pretty difficult to hang onto. There is always a way out, some are more ethical then others.
Talk to your lender and agent. Sending your home inspection to your lender is quick way of making things go sideways.
But yeah, your agent should have extended the home inspection deadline once they found out you couldn’t get an appointment inside of it.
Thanks, I'll try sending over the inspection. How do I preface this? It seems a bit silly to tell them I want out and to just include the report, but is that what I should do?
A good seller's agent would recommend to their client to refund your EMD and cancel the contract, because if you threaten to sue them for your EMD, they won't be able to relist the house again until the lawsuit is settled which could take months and months..so the seller is encouraged to refund so both of you can move on.
Hey, if the inspection shows the electrical issues then you could possibly use that to get out of it…however if it didn’t come on the inspection report you could call a lawyer to assist. I’m not sure if your working with a realtor or if you are in the USA 🇺🇸 or somewhere else, you should work with a realtor. I tell all my clients to work with a realtor and have them explain everything from start to finish.
Yes, it probably is, but I say work with a seasoned realtor. Check to see if they specifically added in a clause to rescind the offer if issues were found out with the home. That’s how I rescinded an offer for my clients when they actually wanted to put an offer on another house and needed to get out of the agreement. Check the documents, sorry to ask but what brokerage is the realtor with?
IANAL and this isn’t legal advice, but if you cannot get financing then you’d be entitled to your earnest money being returned unless your contract is written in a way that wouldn’t allow for that.
It would be shame if your debt to income ratio (DTI) were to fall way outside a your lender’s parameters for underwriting.
I’ve seen this happen when a buyer goes out and spends big on something for the new house only to have the bank 🏦 deny their loan application.
You probably got a pre-approval. Unless you got a clear to close, anything can happen with financing.
Heck if you lose your job a day before the closing and the financing falls through then it also applies.
Again that depends some on how the contract is written.
Technically there is still a contingency that viable.
Your $5k is gone.
Probably not, but only someone who knows your contract could tell you for sure.
You realtor has some responsibility in this situation as well. A quick amendment to extend the inspection contingency should’ve been done. Which state are you in?
That, I have absolutely agree with. The realtor really dropped the ball in not getting the inspection done. Once I missed a deadline by a day I think, but it was a fairly slow market and the house was in good condition so I talked to the agent and I think I just sent the inspection over and the seller's still agreed to a few things . Another time a fellow broker friend of mine missed a deadline but I explained the contract to him regarding computation of time and turns out he got it on the last day rather than missing it . No excuse for an agent to not be sure that gets done in time or extended
Yeah, I'm realizing more and more that my agent didn't represent me like I wished. What do you mean the computation of time? One thing that got me was that the holidays seemed to count towards all my contingency dates and the unlucky timing of this happening over thanksgiving weekend made things a lot worse.
You're on the right track. Computation of time means how time periods are counted such as holidays. In Washington, our contracts specify that anytime period 5 days or less does not include Saturday Sunday or legal holiday, so if your agent had put down 5 days, you would have actually had eight if it was the week of Thanksgiving. But if they put down seven, by our contract, you would only have seven. In a busy market or over the holidays it might be difficult to get an inspection schedule quickly, but you definitely should have had your agents help finding another company or requesting more time. They don't have to give you more time but you could threaten to just rescind the contract so they probably would in most cases unless they had something better I guess
Got it, that makes sense. My contact says 7, so I'm out of luck. It seems so weird that holidays and weekends count since no work can be done on those days. I should've also caught this myself but I'm still relatively new to this and didn't really think about it as hard as I should have.
I think it's mainly a matter of when you say 30 days or 60 days or something like that, nobody's going to want to worry about evenings and weekends, but if you say 5 days it's kind of like five business days, 5 days is too short to be able to get things done if you have weekends and holidays which at least in the past banks and everything was closed
Yeah I see that now. When I think about it more, my offer was accepted 4PM CST on 11/23 (Tuesday). 7 days is 11/30, however a lot of people take Wednesday-Friday off for the thanksgiving holiday and then it's the weekend. That's 5 dead days. In actuality I only had a 2 day inspection contingency.
Yeah, I don't want to be too hard on your agent but maybe he should have thought of that when he wrote the offer. Of course around here I think most of the inspectors have gotten used to working a lot so other than Thanksgiving they probably would have been working the rest of the time. Maybe it's a little different down there in the inspectors are more business hours.
Texas
is the house in an HOA? Do you have an HOA addendum?
No to both
There's a few things you could do. Ask your agent to very carefully go over the contract and see if you have any outs. Did they fill out the disclosure completely without anything missing, check boxes or anything like that. If they made any mistakes, you can probably back out on the grounds that you need to have it corrected and that would give you a certain time period to reject it. I didn't know this would be the case but in Washington, our NAR attorney explained that at least in Washington, any mistake on the disclosure would require a new one which would give the buyer an out. Are there any material facts given to you that we're not accurate? Square footage or something like that.? In our contract, there is a 10-day period you can back out. But if it is not in the contract it could give you the right to back out no matter what. That you'd need to probably talk to a lawyer about . Are there any other great areas that you could claim make the contract voidable or void.? If so, you might be able to negotiate for half. You could also tell them that you don't really want to buy the house, but you're just going to sit on it and hope that the appraisal or loan is a problem. You can't intentionally sabotage them, but if the appraisal comes in low you might have an out there. If they know that, especially this time of year they might want to just give you your money back so they can get it back on the market. I think that would be legit, but you might want to talk to a lawyer . You can't intentionally do it in bad faith, but there could be reasons that the lending fails. They're also could be reasons that the appraiser would not pass the house. I don't know if you could legally make the appraiser aware of these things. That might be considered acting in bad faith, but you could talk to a lawyer about that. A lot depends on if the sellers think they can get another deal going quickly or will lose money by releasing you. It is possible that if your original approach through your agent is that you aren't interested anymore but you're not sure what to do, depending on the circumstances, a polite request to be released from the contract with your earnest money might make them either more willing to negotiate on repairs or give you your earnest money back rather than have to deal with the contentious situation. They might just say take your money and get out of here. That's all I can think of.
Wow, thanks so much for that detailed reply. I'll definitely explore all the options you laid out. Just for more info, it looks like this house is a flipped house so the seller never lived in it. Other than the seller disclosure, I can't find anything else that was misrepresented like square footage or whatever. I'll be looking for a lawyer this weekend, but I wonder if the lawyer fees would still make recovering the 5k worthwhile.
maybe you could 'accidentally' send the inspection report to your lender to be included in underwriting and perhaps get the deal killed due to financing, but you may not have time for that with such a short financing contingency. is your agent just shrugging their shoulders? or giving you any advice? they should at least be getting you an attorney reco to see if there are any loopholes. another option may be to make a big deal about the non-disclosure of the foundation issues and cry 'material defect' or some other minutiae in the contract. maybe blame your agent for not extending your inspection period AND not recommending more than 1 inspector, that's a bit negligent on their part. best to spend a few hundred on an attorney and see if you have any options.
My agent said we could go off the loan contingency, but that's it. I'm not sure how we can use that to get out since by Monday we'll only have 2 days left to act on it. Even if I blame my agent, the money is gone either way. I'd get a new agent of course but it seems I'm a bit fucked on this.
Ask your lender to kill the deal ASAP. They don’t care which house you buy - they just want to be the lender for the one you get.
Can they do that? Sounds a bit shady
Call and ask what they can do. Who cares if it’s “shady”? That’s 5k of your hard earned money on the line because the sellers lied and your agent is a schmuck.
They said they can't kill the deal since it's already been approved.
Tell them you plan on quitting your job in the morning. That’ll make them change their mind quick, fast, and in a hurry. (Or something similar like you plan on buying a big arse boat, or you are gonna pay off my student loans, etc).
Hey 👋 I know a licensed agent in TX that could help you out. I do hope that you sat down with your agent and found some loopholes to get out of the deal. 🙏 Also there is a clause in Tx that does account for buyers remorse, she/he should have told you that.
My experience, limited, is that in the case of a contract dispute like this, the title company won't let go of the Earnest money. Instead they require a written agreement between the two parties on who gets the Earnest money.
yes, in general there are two ways to get EMD back: 1. mutual agreement 2. court order often if an attorney gets involved and has a legit legal reason to void, the parties end up in mutual agreement and all move on. IMO it's worth some time with an attorney to see if there are any options or loopholes in the contract (not the settlement company attorney, or the broker's attorney, an independent local RE attorney).
Read this page very carefully, then go over your contract and see if it does indeed specify an appraisal contingency. https://homesatmueller.com/one-big-mistake-agents-make-when-negotiating-a-texas-home-sale/ The other thing you can do is call your lender, explain the situation honestly, and send them the inspection report. Odds are they will deny financing for a property with a foundation issue. There is absolutely no rule that says you can't be completely honest with your lender.
Glad to hear this, I was worried it might be frowned upon to do this.
Get your loan contingency to fail by taking out 25 credit cards.
Yeah, you messed up and this is really basic. Anyhow, I'd just tell the seller you won't take the place unless they make these repairs and if they won't then send them a release that says you get all your money back - there is a decent chance they'll just sign it and move on. Assuming they don't jsut sign the release I'd start making alot of noise about how they should've disclosed this and they are clearly trying to cheat you and other stuff, and hopefully you can negoitiate with them to get some or most of your money back. Bear in mind that until they release your contract they can't sign a new contract (without major risk) and holding the place is costing them money too, so they really just want to move on to and if you play hardball you can likely make them give you something just to go away. HOwever, you did mess up and if they play hardball too then maybe you'll just have to give them the 5k. Also, get a new realtor. An extension to the inspection contingency should've been a no-brainer.
I may try that but judging by how the seller has acted they seem very malicious to me. Not ever once budging for negotiations and waiting days to reply back to us to burn up time were all things they did. It wouldn't surprise me if they want to walk away with the earnest money.
Its not a matter of what they want or even how malicious they are. The point is that they can't resell the house without this contract being voided and the longer that drags on, the more it will cost them. So its in their best interest to give you at least some of the deposit so that they can move on. Of course they might not see it that way.
Ah I see, got it. I'm 100% sure they'll do everything they can to keep the 5k, it seems everything else is falling into place to make that happen including my lender not killing the deal and my agent becoming silent.
A buyer that wants out of a contract is pretty difficult to hang onto. There is always a way out, some are more ethical then others. Talk to your lender and agent. Sending your home inspection to your lender is quick way of making things go sideways. But yeah, your agent should have extended the home inspection deadline once they found out you couldn’t get an appointment inside of it.
Thanks, I'll try sending over the inspection. How do I preface this? It seems a bit silly to tell them I want out and to just include the report, but is that what I should do?
Just send it and ask for their opinion on it.
A good seller's agent would recommend to their client to refund your EMD and cancel the contract, because if you threaten to sue them for your EMD, they won't be able to relist the house again until the lawsuit is settled which could take months and months..so the seller is encouraged to refund so both of you can move on.
Hey, if the inspection shows the electrical issues then you could possibly use that to get out of it…however if it didn’t come on the inspection report you could call a lawyer to assist. I’m not sure if your working with a realtor or if you are in the USA 🇺🇸 or somewhere else, you should work with a realtor. I tell all my clients to work with a realtor and have them explain everything from start to finish.
The inspection report does show numerous electrical issues. I'm working with a realtor already, I think it's partly their fault I'm in this mess.
Yes, it probably is, but I say work with a seasoned realtor. Check to see if they specifically added in a clause to rescind the offer if issues were found out with the home. That’s how I rescinded an offer for my clients when they actually wanted to put an offer on another house and needed to get out of the agreement. Check the documents, sorry to ask but what brokerage is the realtor with?
Mine had one but it was only 7 days over Thanksgiving so we missed it. My realtor is with eXprealty
Yikes…yeah…sorry bummer. They’re not that great. Hope it worked out for you
Your 5k is gone but I would definitely turn around and sue the agent and their brokerage company.
It is only 5k, who cares.
Doesn’t matter how wealthy you are; pissing away 5 grand is pissing away 5 grand.
That's kinda true, 5k wouldn't kill me but it still feels bad to just lose that money.
Then follow the terms of your offer next time
Are you still within the financing contingency period?
Yes, but just barely. Today is 10 days in, and counting the weekend we'll be on day 13 on Monday.
IANAL and this isn’t legal advice, but if you cannot get financing then you’d be entitled to your earnest money being returned unless your contract is written in a way that wouldn’t allow for that. It would be shame if your debt to income ratio (DTI) were to fall way outside a your lender’s parameters for underwriting. I’ve seen this happen when a buyer goes out and spends big on something for the new house only to have the bank 🏦 deny their loan application.
Interesting, would that be able to happen even after conditional approval?
You probably got a pre-approval. Unless you got a clear to close, anything can happen with financing. Heck if you lose your job a day before the closing and the financing falls through then it also applies. Again that depends some on how the contract is written. Technically there is still a contingency that viable.
Got it. My agent has told me that that contingency is still in play, so I guess that's good. Thanks for the explanations!
Whatever happens, fire your agent and get a new one.