Home Buying in Oakland>Question Details

award0714, Home Buyer in Belgrade, ME

Under contract on a short sale

Asked by award0714, Belgrade, ME Tue Mar 4, 2014

We are/were under contract on an unoccupied short sale in Maine. A week before our closing date, we took our kids to see the house and to do some measuring for flooring and check paint swatches. When we arrived, we were greeted with water pouring from the pot lights in the kitchen, the main floor bath was flooded, etc..long story short...the pipes had burst because the oil tank had run out of oil. The bank has stated that they will not pay for fixing any damage that has occurred. We are walking because it is clearly not our responsibility to pay for this. We initially wanted to go after the the bank to get ALL of our money back (deposit, appraisal, inspection and septic design fee) as it due to the someone else's negligence that we are not following through with the purchase of the home, but we just found out that the seller's realtor agreed to take on the role of property manager and "promised" to watch over the property. Since it was HER negligence, can we sue HER to get our $ back?!

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It's not right, but it is a short sale. In a short sale, anything can happen. I don't know you, but most buyers who offer to buy a short sale assume that everything will go well and they will buy a property in slightly over regular time, but for well below market value.
In reality these rarely go according to plan and in the best cases, they take too long, there are complications along the way and "stuff" happens.
I'm sorry for your situation, and I'm not opposed to you pursuing what may be valid complaints. I just wish more buyers had a realistic view of what they are getting into with short sales.
0 votes Thank Flag Link Wed Mar 5, 2014
I just want to be clear that I'm not some "sue happy" person. My frustrations with this situation are this: we agreed to buy a home in the condition it was in when we signed the contract. I completely understand that "accidents happen", but when you agree to take on a responsibility and then fail to follow through with that agreement - that makes you negligent. I understand the risks involved in buying a short sale or foreclosed property, but the property is no longer in the good condition it WAS in and we are now somehow out the money we invested? How is that right?
0 votes Thank Flag Link Wed Mar 5, 2014
Since you want to sue someone, ask an attorney.
Here's what I see. The bank is not directly involved, they don't own the home. The seller owns the home, but is in financial hardship or they wouldn't be doing a short sale. You can sue them, but odds are they don't have much in the way of attachable assets. The seller's agent doesn't own the home and if they have a written property management agreement you can access, the owners may have a claim against them, since they hired them, but you may have to sue the owners, who may have to sue the agent to collect any money.
Through this whole process, I see you out of pocket money for legal fees, headaches and trouble and the only one coming out ahead is the attorneys. I could be wrong, but again, ask an attorney.
0 votes Thank Flag Link Wed Mar 5, 2014
The broker was an agent of the bank, she did not work for you or have an obligation to you. I think this will make it difficult to prevail in a lawsuit. If anything I would guess that the bank could sue her for costing them the sale. Good luck
0 votes Thank Flag Link Wed Mar 5, 2014
This situation falls into the 'things happen' category. The seller's agent wasn't negligent; neither was the bank. Water leaks can happen any time of the day or night; it's not the agent's job to spend the night at the home in anticipation of something like this happen.

The homeowner is responsible for the property but they gave it back to the bank. If the bank doesn't fix it for you, they'll have to fix it for the next buyer, so they might as well fix it for you. Work it out instead of starting a ridiculous fight you'll never win. The banks insurance company probably covers it.

Short sales and foreclosures are sold at a discount for a reason. I have yet to see a home that was special or cheap enough to justify the risk or aggravation involved with these types of transactions. YOU assumed this risk voluntarily and on your own when you opted to purchase a short sale. It didn't work out for you. There are TONS of dumpy houses on the market that you can buy, and deal with the homeowner instead of a bank. Buy one of those instead.
0 votes Thank Flag Link Wed Mar 5, 2014
You sure can; but I would consult with an attorney.
0 votes Thank Flag Link Wed Mar 5, 2014
You can sue anyone anytime, it has become the American way! The question is whether you will prevail or not. It sounds like you have a pretty strong case because it was someone else's negligence (or in this case it sounds more like someone else's well-intentioned mistake) that caused the damage that ultimately led to you facing a large loss. What you have is a really bad situation where EVERYONE stands to lose money (even if you prevail in court you'll have legal expenses, so you will not likely come out unscathed). You should try to work it out with all parties to minimize everyone's losses. If the "seller's realtor" took on property management responsibilities was s/he paid for them? If so, is s/he insured? If so, that may be the place to look for the $$. Really ugly, unfortunate situation, I'm sorry you have to deal with that. My advice is to try and work with all parties to reduce the ugliness as much as possible. Best of luck...
0 votes Thank Flag Link Wed Mar 5, 2014
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