As I understand the facts:
- you were the seller of a home
- you agreed to give $1,500 to the Buyers in lieu of repairs
- the $1,500 never changed hands(yet)

Please note I am merely expressing my opinion, not offering legal advice. If you need legal advice you should seek out an attorney.

My assumption is that the Buyer was getting a loan to buy your house and that being the case the Buyer's Lender would likely not approve a final HUD for closing that showed a $1,500 "kickback" to the Buyer's like that - yes I know it was legitimate but Lenders don't work that way.

If there was a written agreement by you OF ANY KIND, (even an email or a text message) stating that you were agreeable to giving the Buyer $1,500 at closing in lieu of all repairs then it is my opinion that you have provided notice in accordance with lines 316-321 of the 1/1/2009 version of the Tennessee Association of Realtors Purchase and Sale Agreement (again it is my assumption that you were using TAR forms).

That being the case, lines 295-297 define a survival clause - my interpretation of it says that if you (or your assigns/representatives etc) "forgot" to perform any element of your contract prior to closing, you are still obligated to perform it after closing. So yes, you need to send a check for $1,500 in my opinion.

As for who's fault it was that it was not on the HUD - it doesn't really matter. It doesn't have to be on the HUD and probably couldn't have been on the HUD.

There is a workaround for this scenario that keeps Buyers, Sellers and Lenders happy, but that's information for my clients only - sorry gotta hold something back!

You cannot hand a buyer money for anything. The $1500 could have been used for closing costs on behalf of the buyer or you could have paid an invoice for a vendor (perhaps the work wasn't done yet) and the buyer held the check until repairs were finished. But you cannot hand the buyer cash outside of the HHUD statement. This is mortgage fraud. You should have siigned a paper saying you did not do this.
Check with an attorney, but the fault lies with the selling Realtor who should have checked the HUD statement prior to the buyer signing it.

I really don't think it a matter of "honor."

They didn't let us know what they wanted in terms of repair money until the day of occupancy. We had offered 500 and they sat on that for 3 days. At the last minute, the morning of occupancy when we had agreed that everything had to be settled and all contigencies removed to go forward, they came out of nowhere with 1500.

The biggest item on the home inspection list on the two year old house was "clean drip pan" on the air conditioner.

So, who do you think is really the one taking advantage of the situation?

M
How would you feel if you were the buyers?

Just because something is legal does not make it moral.

Is $1500 really worth your honor?

You need to do the right thing.

One other method would be to challenge the buyers and if they admit that no work was done, then I would ask them why they wanted to money. Perhaps you can pay them a fraction ($200) just to make them happy...because you did agree to pay them.

A note regarding occupancy before close of escrow. In most instances this is not a problem as long as the two parties have an interim lease agreement that stipulates liability, insurance, etc. issues.

Thanks, Fred :) I appreciate your response,

Hi again, M.r.

I am not a Lawyer etc.

You say, "I NEVER SIGNED the Buyer Inspection Contingency Removal/Notification which stated 'seller to give buyers 1500 credit at closing to be used for repairs'".

You also ask, "Am I legally bound now...?"

Without a written signed instrument there was [most likely] No Contract Agreement for you to pay the $1500.

The Buyer and the Agents [most likely] cannot force you to sign something now that the Sale has Closed.

Do what you think is right.

See an Attorney for Legal Advice, ask your Agent for Real Estate Advice.

Best wishes to you,
Fred

Remember, it closed this morning.

I never signed the Buyer Inspection Contingency Removal/Notification which stated "seller to give buyers 1500 credit at closing to be used for repairs". My agent sent me an email this morning asking me to sign it...again, I don't have access to a printer (I am in meetings out of town for my job!)

In your opinion, should I just not sign it and say to heckwithit?!?

This was done last minute because the buyer/or their agent would not get back in touch with us in a timely manner before occupancy.

Occupy Prior to Close is a dangerous thing.

What exactly does your Contract say? Does it stipulate $1500 for repairs, and that those repairs must be in the form of an itemized written request, or does it simply state that you will pay $1500 cash to the Buyer for repairs?

If your Broker made the error, call them on it.

See a Real Estate Attorney for Legal Advice.

Best wishes,
Fred