froggycolor, Home Buyer in Indiana

I am 1 week from closing on my home and have found that the well at the house is no good. Can they still sell the house with no water?

Asked by froggycolor, Indiana Mon Jul 29, 2013

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Answers

15
There are two sides to this coin:
If the Sellers knew about this, and didn't DISCLOSE it to you, they are liable.
The only exception to this is if it is a Foreclosure, then, because the Bank did not OCCUPY the house, they would not have to give you DISCLOSURES.

On the other side of the coin, the phrase "Caviat Emptor" applies, Buyer Beware: You have the chance to protect yourself with an Inspection Contingency: If you didn't do that, and in particular, if you did not choose to inspect the well, then you are buying it as-is and you don't have recourse.

This information is in general, and may be different according to local and state laws.

Good luck and may God bless
1 vote Thank Flag Link Mon Jul 29, 2013
So it turned out OK then. The bank will likely have to write off the whole loan
0 votes Thank Flag Link Thu Aug 1, 2013
Update: this house has no ability to have water. Can not tap into city water & drilling new well is questionable at best. The house is being pulled off market & can not be sold without water. I was able to get ALL my money back.
0 votes Thank Flag Link Thu Aug 1, 2013
We have sort of beat your question to death I think, froggy. If the bank has been good on fixing things for you so far maybe they will drill a new well or perhaps split the cost. Have you had an estimate done? I think I would do that first to determine what your max investment would be. Just be careful that you don't overpay to buy this house after all your costs are in. Foreclosures can often be purchased at 15-20% less than market due to the unknowns and a motivated bank.
0 votes Thank Flag Link Tue Jul 30, 2013
Well I understand the risk in buying any house. this house is in excellent condition. The bank already has invested quite a bit in money in the house. They painted the entire interior, laid new carpet & tile, put in new porch & deck, & I forced them to re-gravel the driveway. I didn't go looking for a foreclosure. I wasn't aware it was one until after it was shown to me. I can afford this house. That is not the issue. No one "wants" to lose $1000. The original question was about the water issue. I only wanted to know where I stood if they decided not to fix it
0 votes Thank Flag Link Tue Jul 30, 2013
Don't count on the bank fixing the problem! If you don't want to / cant afford to drill a new well, then I would back out and get your earnest money back. Yes, you'll be out the inspection fee, but that's better than having to pay for a well! Plus buying a home -- let alone a foreclosure -- has risks. And it costs money! If you can't afford to lose $1000 for inspection & appraisal fees then maybe you shouldn't be buying a house. Deals fall thru all the time and people are out that money and they have to start over. It sucks, but that's the risk you take when buying real estate! Be thankful you can at least get your earnest money back!
0 votes Thank Flag Link Tue Jul 30, 2013
Did you have an inspection done on the property? Have you discussed your concerns with your realtor? and what was he/she recommendation. That's where you should start.
0 votes Thank Flag Link Mon Jul 29, 2013
Please keep us updated as this information will also be very helpful to others on the community here.
It is tempting to buy foreclosuress because of the discount but that is why they say to be so careful.
0 votes Thank Flag Link Mon Jul 29, 2013
It is a bank owned property. It is an "as is" sell. However the well issue was not disclosed but only came to light after I asked for the water inspection. I have faith that they will resolve this issue. Just wanted to see where I stood if they decided not to fix it. Sounds like I could get out of this, if i wanted, based on what you both have told me.
0 votes Thank Flag Link Mon Jul 29, 2013
Yes, they could still sell the house, however, they would have to disclose this. It is in the seller's best interest to work with you as most lenders will not lend on a home without water so the seller would have to find a cash buyer which will limit his buyer pool. If you still want the house, it may be worth it to you to see what the seller will do about getting it fixed.
0 votes Thank Flag Link Mon Jul 29, 2013
Foreclosures are always tricky. You need to expect that the bank who owns the property will do nothing to make repairs to the property. Is it truly owned by the bank or just in the foreclosure process? That being said, water is a basic requirement of a home and I would doubt that the bank would keep the earnest money on that serious an "undisclosed" problem with the home particularly since the inspector could NOT test for it. Putting in a new well can be the most expensive repair to a home (other than structural foundation problems) if you have to drill deep. The appraisal would also not be accurate without an operational well. I don't blame the lender for not approving the loan as without a well it makes the property unsaleable. If it is a foreclosure and the bank gives you a hard time in getting your money back I would suggest a letter from an attorney to them. However if you signed a document which is a disclaimer on the property you could be out of luck on getting your money back.
0 votes Thank Flag Link Mon Jul 29, 2013
My lender will not let the loan proceed with the water issue. The seller is attempting to resolve issue but has dragged their feet on every step so far. They had until last week to get well ready for inspection & failed. I don't want to back out since I will be out over $1000 in inspection, earnest money & an appraisal fee. Just want to make sure they have to get this fixed.
0 votes Thank Flag Link Mon Jul 29, 2013
Because your lender won't approve the loan, you could / should get out of the contract (and get earnest money back) based on loan conditions in the contract...as long as you, realtor and lender haven't let that deadline pass...
Flag Tue Jul 30, 2013
And this is a foreclosure.
0 votes Thank Flag Link Mon Jul 29, 2013
I was going to have the well tested. It had no power going to it so the inspector could not test it. Seller was made aware & was supposed to get power to it. They found out the well was no good and would need redrilled.
0 votes Thank Flag Link Mon Jul 29, 2013
Did you find this out during the buyers inspection? Do the buyers know that the well isn't good? If they don't know you need to disclose this information to them. The buyers have the right to walk or stay under contract. The buyers lender may be another issue. Depending on the type of loan they have, the lender may require it to be fixed before the sale goes through. You could always see if the buyers lender will allow you to pay a contract at closing or escrow the repairs at closing so you don't have to pay to get this fixed prior to closing.
0 votes Thank Flag Link Mon Jul 29, 2013
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