Home Buying in Long Beach>Question Details

frankbolagio, Home Buyer in Massapequa, NY

im in contract to buy, and was supposed to close on or about nov 1st the seller moved the closing date to dec 1st and we were not able to close.

Asked by frankbolagio, Massapequa, NY Tue Dec 11, 2012

im in contract to buy a house in ny, and was supposed to close on or about nov 1st the seller moved the closing date to dec 1st and we were not able to close due to damage it sustained in flood. they are in the process of putting the house together. do i have any way to renegotiate the purchase price? or back out? does the contract have an expiration date? i feel that the home as well as the area has depreciated by at least 100k

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Ron Thomas’ answer
Your question becomes a LEGAL question only if you WANT it to:

Whassamatter? Don't youwant the house?
Did you change your mind?
Didn't you know what you were getting into when you made the Offer?
You are talking like a VICTIM.
1 vote Thank Flag Link Tue Dec 11, 2012
Ron,
I have to respectfully disagree with your answer. His question IS a legal question. He was asking about his rights under the contract in view of the unexpected delays in closing. It only becomes a legal ISSUE if he wants it to be. He is quite correct to find out what his legal position is before he decides if he wants to make an issue of it.
Also, you apparently did not pick up on the questioner's location. He is in Massapequa, New York, which is on the south shore of Long Island. This area was particularly hard hit by Hurricane Sandy, which hit us on October 29. So no, he did not know what he was getting into when he made the offer, no one did. His concerns about the reduced market value of properties in shore areas are probably well founded, although it is too soon to tell if they will be borne out. From his description, we do not know how badly the home in question was damaged, but it is quite possible that the damage is extensive.
Flag Tue Dec 11, 2012
First of all, Frank, your question is really a legal question, and you should be posing these questions to your attorney. Brokers and Salespersons are not allowed to offer legal advice.

Having said that, I can suggest several questions which you might raise when you speak to your attorney. First, while I haven't seen the contract in your transaction, the contract form we use provides that the Seller is responsible for all damage which occurs up until closing, and that if the cost to cure the damage exceeds 25% of the purchase price the Buyer has the right to walk away. Your attorney can tell you exactly what your specific contract provides.

Second, will the home be put back exactly as it was when you agreed to buy it? If there will be material changes in the home as rebuilt, that may (or may not, I'm not a lawyer) give you grounds for voiding the contract.

Third, you mentioned that the home flooded. Was it in a known flood hazard area when you agreed to buy it? If not, can you find out if FEMA intends to expand the flood hazard zones to encompass this area? An area which was not a flood zone being ruled a flood zone would be a material change in condition, and your attorney can tell you if that would be grounds to void the contract.

Fourth, on the assumption that this was not to be an all-cash transaction, have you spoken to your mortgage lender to see what their reaction to these events is? If they are going to require flood insurance, that is again a material change. They may not renew your commitment when it expires, which it may well do before the seller is ready to close. They may also decide to require a new appraisal, which if your feelings on values in the area are correct may no longer support the loan amount. Your attorney can advise you on the impact of any of these potential changes on your contract.

Finally, there is simply the question of timing. You are already about 6 weeks or so past the originally scheduled closing date. Depending on the extent of damage, you are probably looking at another 60 days at a minimum before the seller can close. This delay alone may be grounds to void the contract.

Have a conversation with your attorney and go over these issues, and the others which I am sure he will raise. Have an idea in mind of where you want to come out. Do you just want to forget this deal, or do you want a lower price to compensate for the delay, etc.

One business, not legal, point that I would insist on if I were in the buyer's position here. If the damage is extensive, particularly if it involves structural elements of the house, you should have your own architect or engineer (not home inspector) periodically inspect the work being performed to make sure it is being done properly.
1 vote Thank Flag Link Tue Dec 11, 2012
The seller cannot extend the closing date without your consent. If you both parties signed and agreed to the new closing date, then that date is now the valid contract closing date.


You can have the home appraised again, if it appraises for less than the sales price you will have every right to cancel the sale. Your contract should have an appraisal contingency.

Another option is if the home appraises less than sales price you can lower you offer price to be in line with the revised appraised value.


Best of luck to you,

Kawain Payne, Realtor
0 votes Thank Flag Link Tue Dec 11, 2012
Did you get a written extension? If not, then you have a right to cancel since they did not honor the original contract. Do you have an agent? If so, contact your agent. If not, consult with a real estate attorney.

Good luck.
0 votes Thank Flag Link Tue Dec 11, 2012
Great question. California Contracts are different. Our contract will speculate if a certain "percentage" was damaged by natural causes, the seller will fix and the contract is valid. Sit with your realtor and discuss all the options and possbilities. If you moved the closing date.... did everyone sign and agreed to it or was it just verbal. Here in California, if you didn't close on the contract date you do not have a contract, it expired (unless there is an addendum extending the closing time period signed by all parties)

Lesley Harris, Realtor
(562) 673-0943
LesleySells@gmail.com
0 votes Thank Flag Link Tue Dec 11, 2012
You should definitely sit down with your agent, and contact an attorney. There are a lot of things going on here. Have you released your contingency dates? Was the flood damage disclosed to you? Without your paperwork in front of me it is difficult to give you my personal opinion. In the end the attorney will give you a better idea of what your options are at this point. Good Luck!
0 votes Thank Flag Link Tue Dec 11, 2012
Good Question/ First of all, Does the seller have a valid reason. Have you signed any extention or amendment to extentend the closing date. What is you Agent telling you. So you need to have your agent give you more information, and your contract could be extended and you dont know. So get all the information from your agent. Also are you still interested in the house or do you want out? So alot of questions to ask yourself and your agent. Good Luck. Let me know the out come. Thanks for the question, you have alot of great agents who have good answers for you. Diane 714-618-8031
0 votes Thank Flag Link Tue Dec 11, 2012
All good questions....for you to discuss with your REALTOR and probably an attorney! If you were supposed to close Dec 1st, and you haven't signed an amend/extend moving the closing date out again, you're now out of contract. I would talk to some professionals and discuss what you want to do at this point.
0 votes Thank Flag Link Tue Dec 11, 2012
Your questions can be accurately answered by your attorney, therefore consider a consultation; or review your contract as the answers may be found in the document....
0 votes Thank Flag Link Tue Dec 11, 2012
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