Foreclosure in Charlotte>Question Details

Lexi Hazen, Renter in Charlotte, NC

Illegal foreclosure money return

Asked by Lexi Hazen, Charlotte, NC Tue Jun 19, 2012

Recently, we were a week away from closing on our dream home when we found out that the bank did not follow proper procedure while foreclosing on this home and legally had to terminate our contract. Is there any way for us to get back the money we spent on inspection and appraisal since it was a house was legally not able to be sold?

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Goods morning, Lexi:
This is definitely a question for your real estate attorney. There are usually provisions in the bank addendum that will describe what type of title the bank is required to convey and what happens if they cannot convey clear title. Most addenda I have seen limit the banks' liability to the return of the earnest money; no money back for inspection and appraisal.

This is a good example of why an attorney who exclusively represents the buyer should independently verify good title and confirm availability of title insurance availability before a buyer spends money on anything else. If you appreciate an answer, please give "thumbs up". For the most helpful answer, please say thanks with a "best answer" click.
0 votes Thank Flag Link Wed Jun 20, 2012
Thanks for all of the help!
0 votes Thank Flag Link Tue Jun 19, 2012
Under normal circumstances, if a seller breaches the contract and is unable to close on the property, according to paragraph 8(m) of the Offer to Purchase & Contract you, as buyer, would be entitled to getting your earnest money and any due diligence fees back, plus you would have the right to sue the seller to collect against any reasonable costs you incurred towards the purchase, which would include inspections & appraisal costs. Your situation is different, however, in that you were purchasing a foreclosure. When you signed the NC Offer to Purchase & Contract, you, may have had to sign Addenda from the Bank (seller). Read through that document very carefully. It most likely enumerates what rights you, as buyer, have, or do not have in the event of that the bank is unable to close the sale. If there is an addendum, the addendum overrides any language in the Offer to Purchase & Contract. If there was no addendum, read paragraph 8(m) of the OTPC.

Definitely have your agent reach out to the listing agent and ask that they advocate for you in seeking reimbursement of your expenses. It never hurts to ask. You may end up with nothing, but at least y ou can say you tried. Best of luck!

Kathleen Turner, ABR, CRS, ePro
Certified Paralegal
The Kathleen Turner Realty Group
0 votes Thank Flag Link Tue Jun 19, 2012
Get your Realtor to be your advocate with the bank to get it returned and I would also check out the small claims court option, since appraisals and inspections would have been under the small claims court maximum.
0 votes Thank Flag Link Tue Jun 19, 2012

You do not deserve this result! I suggest calling your real estate attorney and title company to get more details and find out what your options are at this point. Realtors can not give legal advice.

0 votes Thank Flag Link Tue Jun 19, 2012
Call or email a local NC state representative and get them involved. I bet you will get your money back!!!!
0 votes Thank Flag Link Tue Jun 19, 2012
We have been waiting it out in hopes that they will give us money for damages back. We asked the bank's realtor for the money for inspection and appraisal, but have not heard anything back. We have not signed our paper work to terminate the contract, but heard that the house was going to be on the market shortly. Is it true that they cannot sell the house until we sign those papers? We were willing to wait on this house, but the selling realtor said we would not be guaranteed anything when it went back on the market.
0 votes Thank Flag Link Tue Jun 19, 2012
Typically in North Carolina you are entitled to your earnest money back. You cna contact an attorney and see fi ti is worht the fight to get back your appraisal money and inspection fees. Unfortuantely, I think it will cost you more than you would get back if you did win.

Did the back offer any option or say anything about how long it would take to resolve the issue and could you wait it out if it was a reasonable time frame? i have been in situations similiar to yours (not knowing ezxactly the whole story) where the bank filed a wrong paper or forgot to file something and had to delay the closing and cancel the transaction only to have it resolved in a week to two weeks so we could close...

You may want to have your Realtor check witht he bank Realtor and see what the story is behind this and whther you can still get the house.

Dave diCecco
0 votes Thank Flag Link Tue Jun 19, 2012
Since we use attorneys here to close, not title companies, what is your attorney saying? I would think the first step is to ask for a refund and hope that works. Any way to wait for the bank to correct this so you could buy it? Good luck
0 votes Thank Flag Link Tue Jun 19, 2012
My suggestion would be not to ask the Real Estate community, but to seek advice from an attorney. I suppose you could ask your Realtor to at least ask the bank. Perhaps the bank will!
0 votes Thank Flag Link Tue Jun 19, 2012
Many contracts have a section where you can opt/in or opt-out of Arbitration and Mediation:
If you Opt'ed in, then you will be forced to use it.
If you Opt'ed out, then you can use a Lawyer or Small claims court.

You should be able to get your Deposit bacvk from the Title company, since you are a principal.

All this is irrespective of the question of the "proper procedure while foreclosing":
What does this have to do with you, as long as you will have clear title?

Good luck and may God bless
0 votes Thank Flag Link Tue Jun 19, 2012
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