Ok...lot's going on here! First.....no they are not required to do mold remediation.....but I'm surprised that they refuse outright. I have and home inspector I use BECAUSE he is a certified mold expert......honestly? I've never seen a lender refuse to do something on a mold issue.
The Where-is, as-is clause is the notification that they have no intention of fixing any problem, including mold...but unless you have released the home inspection contingency, you are within your rights to walk away. I realize that's not what you want to do....but it is an option.
If you do walk away, they are required to disclose that they are aware of a mold problem to any future buyers....and will probaly reduce the price or make concessions to a future buyer. So they have incentive to make sure it goes through with you. Perhaps they are just pushing back a bit.
You have a couple of choices.....1) go through with it or 2) threaten to walk away. I think it's time your agent plays hardball....I'm sure he/she is great...so will know what to do. But if you are ready to close and only need a bank concession to finish the transaction....I think they should handle it for you. I had a mold problem worth $15,000 on a home in Murrieta only priced at $199,000 and the bank took care of it. This is a problem most banks will handle..thougth sometimes it takes some hardball.
I know this is very frustrating and upsetting....if you would like to talk more privately..or your agent, since I have some experience with mold issues and banks...please shoot me an email directly? or have your agent do it and I would be happy to help in any way I can. I know the goal is to close this deal.
I wish you well...and please feel free to contact me directly for any advice I might offer.
Only you and your inspector know how serious of an issue this is as there are different levels of mold concern tied to species and infiltration. I treat just about ANY health and safety issue that cannot be remedied with a hand tool within a hour to be a deal-breaker. Mold is definitely a hardball deal-breaker.
You might suggest to your agent, provided this is the only deal-breaker, to submit a removal of inspection contingencies, subject to, the REO taking care of this problem. I would give them one week to respond, after which, I would seriously consider walking away if this issue is not corrected.
One other potential option arises if you are using an FHA loan, as these REQUIRE that all health and safety issues be corrected before funding. Hence, if you still have your loan contingency, and are using a FHA loan, you have some additional bargaining power at your disposal.
Finally, it may be easier to negotiate a closing cost credit or price reduction to cover the remediation cost; however, this can be monetarily risky as one never knows the extent of the mold condition until the actual remediation starts.
Most will tell you that once an issue such as this has been identified it becomes their responsibility to disclose this knowledge to any future buyers. Thus, they can sell it but there should be stipulations attached. The best action they can take is to make the repairs.
If you are still within your "window" and the seller is unwilling to make repairs, your options are likely limited to either proceeding regardless or to back out of the agreement entirely.
By the way, what kind of mold are we talking about in the kitchen? Mildew is mold and most inspectors will note it. So. are we talking life threatening Ed McMahon level mold or Scrubbing Bubbles. Ask for some clarity from the inspector and you may save yourself a lot of heartache.
I agree wiith Karen, mold is the one of the things that banks usually will fix since it is such a big liability issue. That has been my experience as well. I'm sure they don't want to go back on market as a stigmatized property -- it is in there interest to fix it. Some banks won't even allow a property to be shown when it has mold in it without buyers signing a waiver. You will have to threatened to walk and see what they will do if it is an important to you. Good luck!
The bank is not required to do any mold remediation but it would be wise of them to try to work something out with you. If they don't want to pay for the entire repair, maybe they would be willing to split the cost with you 50/50.
Look carefully through both the contracts and addendum's you signed, you may find a clause in the bank's addendum's that releases them from all liability regarding the condition of the house (to include mold) and makes you fully responsible.
I agree you should play hard ball now. The bank is trying to see how far you will go so its time to show them exactly how far you are willing to go. If they don't want to work something out then threaten to walk away and see what happens. Usually they are more willing to work something out if they know they are going to lose the sale.
Best Of Luck To You,
Michael G. Grimm
1. The CAR Residential Purchase Agreement states that the home is sold in its "as is" condition. Disclosure is required, but the neither the bank nor their listing agent has ever lived in the home and in the proverbial words of Sergeant Schultz "they know nothing" and therfore have nothing to disclose. This what Bertisbert calls a clause does "protect" the seller - and makes it clear to the buyer that they get what they get.
2. Will the bank make an accommodation once the mold has been detected, validated, and and estimate for remediation provided? Yes. In most cases.
3. Here's how make a case for the bank to cut you some slack:
Have a certified mold inspector do an inspection.
If mold is "suspected," have test samples pulled and sent to an independent lab for analysis
Do the lab results show high concentrations of toxic mold?
Then get a mold remediator to bid on the demo, remediaion, and restoration.
Then pull samples again to prove the areas previously impacted are now clean.
All 4 parts. Becuase that's what you'll have to do to get the ick out of your house.
4. Work with your Realtor to submit an addendum to the Purchase Contract to either credit you back the total amount for demo, remediation, and restoration, and clearance testing, or ask that the bank do it all, prior to close of escrow.
Make sense? This is a very precise process, not really diffucult, but time comsuming and requires experts.
Hope this helps!
Realtor, Altera Real Estate
in the Orange County Register: tp://www.ocregister.com/articles/room-265036-home-rule.html
Bottom line is if the bank is refusing to cover the costs, be sure you know what the total costs to remediate will be before making a decision on whether to proceed.