Home Buying in 28625>Question Details

Fergusonfami…, Home Buyer in North Carolina

If the home loan never closes, who pays for the inspections?

Asked by Fergusonfamily6, North Carolina Wed Feb 1, 2012

We are trying to buy a home, but the roof needs replacing. Our USDA direct loan, requires that ALL repairs be done BEFORE the closing of the loan. So, he HAS to fix all major, safety issues, like the roof, or we cannot close. He is refusing to pay for the roof. We cannot pay for it out of pocket. The direct loan is for low and very low income famiilies. If he doesn't change his mind, we will have to terminate our contract, so that we will get our earnest money back. However, our agent is telling us that even then, our earnest money will have to go towards the terminate inspection, home inspection, and lawyers fees that have already been done with this home loan. Originally, the seller had agreed to pay these cost in the closing costs, up to $4200. We were never told that would have to pay any of these costs! Now it seems as if we may have to pay for inspections and fees on a home we may never own. Who is responsible for the fees? We live in NC. Thanks

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In NC, you the buyer are responcible for inspecting the home. And in almost every case, you ordered the inspection. I agree with Don, try to salvage the deal rather than wasting money. Maybe you can find a contractor who is willing to do the repairs on credit or with a small downpayment.
0 votes Thank Flag Link Wed Feb 1, 2012
Don has a good suggestion in order to remedy your current situation perhaps it will work out. What was the appraised value?

The buyer is typically responsible for all inspections they order.

Don't feel bad, your inspection fees discovered a problem that the seller has to either:

a) live with
b) repair before he can sell to someone else

Therein lies the protection you receive from having your property inspected. Now, if you still want that home and have the funds you might want to look into a 203k rehab loan.

email me for more details if your interested.
0 votes Thank Flag Link Wed Feb 1, 2012
Unfortunately, your agent is correct. Problem is: The work (the termite inspection, home inspection, and legal work) has already been done. Those folks are owed their money. The question is: Who pays? The person who asked that the services be provided (the customer or lawyer's client) is responsible. That's you.

Best thing to do, at this point, is to try to salvage the deal. I don't know enough about USDA loans, but can the purchase price be bumped up a tiny bit so that the extra will cover some of the cost of the roof repair? That way, he'd be out of pocket for less.

Maybe your agent has some suggestions. I'm sure he/she would like the deal to close.

Failing that, maybe spend a few more dollars with the lawyer for a firmly written letter to the seller reminding him of his obligations.

Good luck.
0 votes Thank Flag Link Wed Feb 1, 2012
Don Tepper, Real Estate Pro in Burke, VA
Unfortunately for you, your real estate agent is correct. You are responsible for all costs associated with any inspections that you requested. This is referenced in the NC Offer to Purchase & Contract #4 (b). The seller paid closing costs (inspections) are only payable at settlement #8 (h). Also you should have completed the Professional Services Disclosure with your agent that indicated all of the inspections that you selected. It also states in #2 that the fees for the inspections are payable to the vendor regardless if the transaction closes or not.
I hope that your transaction works out favorably for everyone involved.
Shannon Griffith
0 votes Thank Flag Link Wed Feb 1, 2012
I am sorry you are having this problem and may end up losing this home, however, it is the buyers responsibility to have all inspections done. A home inspection is not required by the lender ( although highly recommended) and is the choice of the buyer. The termite may or may not be required. The seller may have a difficult time selling that home to anyone that will require financing unless a buyer does a renovation loan and include the roof.
Even though the seller agreed to pay closing costs, that only applies if the deal closes. This is part of the risk you take when buying a home and your agent should have explained this to you. I wish you the best and hope you find a wonderful home.

0 votes Thank Flag Link Wed Feb 1, 2012
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