So you just had your home inspection done on the home you are considering purchasing and the results of the inspection have you a bit disappointed. Maybe the home you were looking at isn’t exactly what you thought it was, and now you are reconsidering your offer. But wait! The sales agents involved say you are bound by the purchase agreement and are obligated to either purchase the home anyway or allow the sellers an opportunity to repair the items listed in the inspection report. They may even tell you that you will lose your earnest deposit and that the seller may also sue you.
In your mind, you are done with the whole fiasco (and rightfully so) and are ready to move on and continue looking at other homes. The sales agents on the other hand smell a commission check close at hand and are fighting you tooth and nail trying to hold the deal together.
So what can you do to prevent this from happening to you?
BEFORE you begin your house hunting journey, enlist the services of an exclusive buyer’s agent or a qualified real estate attorney. NEVER call the listing agent of a property you are interested in. When you are dealing with the agent of the seller, by agency law, that agent owes a responsibility to the seller to represent their best interests first in the negotiating of any offer. The goal of the seller is to sell the property at the highest possible price. The goal of a buyer is to buy the property at the lowest possible price and with the most favorable terms. Hence, if you are buying a home, you need a buyer’s agent or an attorney representing YOUR interests.
Once you have found a property you are interested in, make sure that you understand the purchase agreement and all contingencies listed in the agreement. It is very important that you fully understand what is in your contract and more importantly how to get out of it.
Laws vary from state to state concerning the home inspection contingency and in many cases are very open to interpretation. The absolute best way to protect yourself AND your earnest deposit is to make sure that the verbiage in your contract is clear and concise before you sign it.
If you take away one piece of advice from this blog, let it be this: You will have an out if the sales contract is contingent not only upon completion of the home inspection but your full approval of the results of the home inspection. That means that there must be a home inspection completed AND you must approve of the condition of the home based on the home inspector’s findings.
If the contract is written with only the contingency of getting a home inspection, then once this task is completed, you are obligated to buy the home no matter what the results are. If the contract was written such that if the home inspection uncovers defects and the seller agrees to and fixes the listed defects, then once again, you are obligated to buy the home.
This article is provided for informational purposes only, and nothing stated here should be construed as legal advice. If you are experiencing a similar issue like the one mentioned in this blog or need help with any other real estate law problem, you should contact a qualified real estate attorney and discuss your options.