Home Buying in Freehold>Question Details

elochka1206, Home Buyer in Nampa, ID

Buying a short sale with issues that were hidden by the realtor, what recourse do I have?

Asked by elochka1206, Nampa, ID Fri May 3, 2013

I'm buying a short sale in New Jersey and I have a written approval from the bank. The realtor hid the fact that there are plumbing issues in the house. I discovered this when the water was being turned on in order to do a CCO inspection, there was a leak from one of the pipes in the basement. Therefore, water was turned off again. We have not closed on it yet. There is damage in the basement from a previous leakage. I was wondering if I have any leverage as far as getting the price reduced and how to go about it?
Realtor knew of a failed previous inspection but did not disclose this info to me. The agent that is representing me is an associate of the listing agent, in fact she was referred to me by the listing agent to use. I feel my agent is not really looking out for my interest. Do I have any recourse? I don't know what my rights are?
Any advice would be appreciated.

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Answers

7
You said that both agents work for the same brokerage. When you speak to your attorney make sure you explain this. Did you sign a buyers dual agency document? That is required in NJ when the same brokerage represents the buyer & seller.

Good luck!
1 vote Thank Flag Link Mon May 6, 2013
If you want to get out of the deal talk to your attorney and find out your rights. You said there was evidence of water damage. Did you have the house inspected? If you did then you knew there could be a problem and you could have bailed under the inspection contingency. Short sales are sold as is. If there is a major structural, safety, or environmental problem in a short sale home you might get a price concession from the bank. I have been pretty successful getting those in the past, otherwise the agreed on price stands. Quite frankly, if you are already getting the house at a sufficient discount under market value then your cost for the plumbing repairs is just part of the deal.
1 vote Thank Flag Link Sat May 4, 2013
Good answer. I have my lawyer asking for a 6% reduction. Getting out of the deal is not my concern, that's probably what they want, considering the market has improved compared to a year ago. Yes I've been waiting a whole year before getting a written short sale approval from the bank. That is why I recently ordered a home inspection and the report indicates structural issues that cause water to seep into the basement.
Flag Sun May 5, 2013
You say your agent is an associate of the listing agent. Do they work for the same brokerage?
1 vote Thank Flag Link Sat May 4, 2013
Yes they do. My agent was referred to me by the listing agent. At times I've heard her say that she is the listing agent"s assistant.
Flag Sun May 5, 2013
As mentioned, you need to ask your attorney. In my opinion, which is not legal advice, the listing agent never should have referred you to an associate with the same broker. This would not be in your best interest, due to the conflict of interest, nor would it be in the best interest of the seller since it forces a dual agency situation, which is not in the best interest of the seller.

New Jersey requires full disclosure of material facts. Dual agency, which both agents are working under, would not allow preference to the buyer or seller.

Talk to your attorney to determine how to proceed.

As to negotiations, they only end when both sides agree.
1 vote Thank Flag Link Fri May 3, 2013
"New Jersey requires full disclosure of material facts". What are the material facts? Would previous CO or Home inspections be among "material facts"? Both agents informed me in the past that the house had passed CO inspection last year. I recently found out from the inspector himself that the house infact had failed the last CCO inspection.
Flag Sun May 5, 2013
You are making some bold statements about who knew what about what..

Short sales are pretty much sold "as-is” as there is usually no money for the seller to fix anything. You can ask the bank, but usually these homes are sold so cheap.. they are not going to give anything. Why do you think the realtor knew about the water, you did not see or smell water damage? Leak as is.. Geyser leak or water dripping.. Damage as in the basement is full of water or damage as in, there is some wood rot because of a leak.

People who buy homes need to do their due diligence. YOU need to have an inspection, even if it is for your own knowledge for a short sale to know what you are getting into. People who buy short sales, know there are issues at times.... but the overall savings of getting a home at probably 50% below market value outweighs the plumber charging you $300 to fix the leak.

In this market people always look to blame someone else. Something for free. Don’t buy the house. It is a short sale, and now that there is approval I would bet that someone will step right in and take your spot.
1 vote Thank Flag Link Fri May 3, 2013
Where are you looking for a home? Look at the recent sale I just closed at 70 Fern Road in East Brunswick. Looking for two years and could not find a short sale that is crazy profitable? Really? I just do not know what to say... There are m-a-n-y out there, you just need to be with the right person and persevere. I happen to know what I am doing. Simple as that.
Flag Mon May 6, 2013
I've been looking for a home for more than 2 years. I have never seen such discounts on a short sale. Can you send some examples to my email? Elochka1206@yahoo.com
Flag Mon May 6, 2013
um, no I know the market very well. I have sold quite a few short sales. Recently was a 900k house for $552k. Another was a 400k home for 225k another is a 350k home for 220k. these are recent.. there are more. only one has had an issue.. If you are 20% below market.. you are still making out like a bandit. although you use the term "structural flaw" not sure what that means, but I have seen real bad structural flaws as in bowed foundation walls remediated for $5k. Still not a bad deal.
Flag Mon May 6, 2013
I think you are out of touch with the market. In a desirable neighborhood with a good schooling system in NJ, finding a short sale at 50% below market value simply does not exist. At best it will be 20% discounted. A short sale house in some cases is empty, neglected and usually in need of many repairs. Which can get very costly. My post is not about a $300 repair, I would not be posting here if it was just that. There seems to be structral fault that is causing seepage into the basement.
Flag Sun May 5, 2013
If your contract was contingent upon a home inspection and there is a problem, you have every right to walk away. Remind your agent of this. If you believe your agent is not looking out for your best interests under a dual agency, then call the agents listing office and ask to speak to the broker in charge.
1 vote Thank Flag Link Fri May 3, 2013
I may consider calling the broker in charge. I feel that many facts were not disclosed by both the listing agent and the agent that is representing me. Now they are coming up after a CO and a home inspection.
Flag Sun May 5, 2013
I would recommend you talk to your attorney. Realtors are not attorneys and are not permitted to give legal advice. As far as the price, you can try asking the bank for a concession but I would not hold out a lot of hope.
1 vote Thank Flag Link Fri May 3, 2013
Thanks for the responce.
Flag Sun May 5, 2013
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