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The Cause and Effect of Post-Contract Home Inspections

Richard Montgomery on

Dear Monty: We are first-time homebuyers. We asked the seller for a credit when the home inspection revealed several defects. They refused. Our agent thought we should let them handle it. The sellers agreed to make multiple repairs and remove mold. They also agreed to a new furnace and compressor. The sellers used handymen and unlicensed contractors to satisfy the contract and installed an off-brand furnace. It doesn't even have a name, and there is no operating manual. In speaking with a neighbor, I learned there was a fire they never disclosed. The city has a permit on file under the seller's name that states it was fire-related. We are fed up with the seller lying and using cheap solutions, and we want out of the deal. They scheduled the closing in about a week. Can we get out without losing our deposit?

Monty's Answer: The seller complied with the contract from your comments. The home inspector did not see any evidence of a fire. Sellers often have a mindset and behavior patterns consistent with their life experiences. Their experiences may be very different from your experiences. They might have made the repairs the same way if they were making these repairs for themselves. Another possibility is that the home's age, neighborhood, quality of construction and condition are such that they consistently maintained the house to match. But that may not have been the right thing to do.

Your complaint regarding the condition issues is common when the buyer orders the home inspection after the purchase contract is in force. Post-contract inspections are a standard procedure in the real estate industry today. Most real estate agents believe pre-offer inspections are additional work and liability if the home doesn't sell, and they are fearful of potential seller backlash if an inspector discovers a problem.

Had the seller provided a home inspection, corrected the defects and shared the inspection with you before you reached an agreement, this situation having developed would be unlikely. You would have seen the new furnace and the repairs completed. Or the seller would have disclosed the inspection, so you knew of the defects before making an offer. The red flag was when they refused to give you a repair credit or a price reduction. It now appears that both parties are involved in an untenable situation. Here is an article on Dear Monty that elaborates on pre-sale inspections.

The real estate industry's design and methods are over 100 years old, and their ancient practices are not in the best interest of their customers. Today's real estate agents are not at fault. The systems in which they are working are the cause. The post-inspection is the effect.

A LEGAL OPINION

 

You should seek a legal opinion from an attorney whose primary practice is real estate. Each state has different theories and statutes that would affect the answer. The amount of your deposit may also be a factor. Act quickly as the closing date is near. Here is an article on Dear Monty that offers a process for identifying a competent lawyer.

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Richard Montgomery is the author of "House Money: An Insider's Secrets to Saving Thousands When You Buy or Sell a Home." He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty, or at DearMonty.com.

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