Home Selling in Illinois>Question Details

Sally, Home Buyer in Algonquin, IL

Home Inpection Contingency: I sold my home and buyers are not responding on home inspection negotiations.

Asked by Sally, Algonquin, IL Sat Apr 5, 2008

Can they let the contact lapse in this respect?

We're in Illinois. The buyers had a home inspection and came in at the 5 business day mark and asked for a number of "repairs" on our property. We had our attorney respond with what we were willing to do. They have not responded to this for a few days. In two business days, we will reach the 10 business day mark for resolution of inspection issues. Can the buyers let the contract lapse (null and void) by just not responding to our proposals?

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I agree, it is the job of your attorney to advise you how to handle the information contained in the home inspection. I am curious, were any of the items noted by the home inspector health or safety related, and, were the items noted "significantly deficient" or not "operating as intended".

Since this was posted a few days ago, let us know how this was resolved. Thanks
0 votes Thank Flag Link Thu Apr 10, 2008
That is a question that your real estate attorney can and will answer for you.
0 votes Thank Flag Link Wed Apr 9, 2008
the answer REALLY depends on which "form" of contract you used for your sale. there are roughly ten or so different fill-in-the-blanks forms that are in widespread use in the chicagoland area. one very popular form provides that the contract is AUTOMATICALLY terminated if the parties do not reach agreement within 10 business days from acceptance (that is, unless the parties agree to extend the deadline). most all of the others are a bit more nebulous and allow either party to terminate if an agreement cannot be reached.

perhaps you should ask your real estate agent and/or attorney to make a quick phone to their counter-parts to see if a response will be forthcoming? perhaps even a deadine and threat to pull the plug on the contract if they do not respond in a timely fashion?
0 votes Thank Flag Link Sun Apr 6, 2008
Hi Sally,

If the buyers do not respond, your attorney or realtor should be able to get to the bottom of it, as exlpained below. Yes, they can let it lapse if they do not agree to your "repairs". Our contracts allow 5 business days for the inspections. Unless the attorneys asked for an "attorney approval of 10 days" instead of 5 this would be ok. Did your attorney ask for an extension? Please read the inspection paragraph in the contract. It does state if an agreement is not reached, the contract is null and void.
I would suggest to talk to your attorney and realtor on Monday and clarify everything. And if it doesn't work out, put it back on the market immediately, the market is picking up! Good luck to you!
Web Reference: http://www.idamccarthy.com
0 votes Thank Flag Link Sat Apr 5, 2008
Sally
I do not know Illinois real estate law (disclaimer).
The purchase contract should stipulate both parties obligations.
In California the standard residential purchase agreement provides the buyer with an inspection (contingency) period. At the end of that period, all contingencies (loan approval, appraisal, inspections) need to be completed, then a Removal of Contingencies form is signed by the buyers, releasing the contingencies. It is possible not to release all of them.

When an issue arises from an inspection (which is common), the buyer issues a Request For Repair, which the seller can either agree, disagree, or offer a compromise. Then the buyer has to agree, disagree, or counter propose another solution.

Normally, in the real world of people, not legal forms, the two Realtors representing both parties are talking on the phone or via email about the negotiations. In other words, if the buyers want a lot of repairs completed (more than the seller is probably willing to do), you have a classic case of Realtors negotiating on their client's behalf.

Buyer's Realtor: "The buyers were really disappointed with the inspection report because the house looks great, but there are some serious problems the inspector found. The electrical system is 50 years old and the entire thing needs to be replaced".
Seller's Realtor "I am sorry that your buyers are disappointed. Most homes in this area were built in the 1940s and 50s, so their electic systems are old, but they still meet code. Are you saying that the buyers won't proceed unless the entire electrical system is replaced?"
Buyer's Realtor "No, but they are concerned about buying a home with an old, outdated electrical system and would feel more comfortable with a new one"
Seller's Realtor, "If the system was not up to code I think you'd have a case, but as it is as long as the system passes inspection I cannot talk the seller into spending thousands of dollars on a new one. So if the seller repairs the garbage disposal and the sprinklers, are your buyers okay with proceeding?"

Just to give you an idea...the two Realtors would know if there was a material issue (one that would cause the buyers to cancel the purchase) far before the paperwork stage. In the above case it is common to have conversations, then then buyer's Realtor would discuss with their clients regarding how they would like to proceed. Some buyers think that they deserve a entirely rebuilt home, and most sellers are not going to agree to that.

So in California if a buyer had submitted a request for repairs, then the seller responded, there would still be an inspection contingency that needed to be removed. At the 24 hour mark, if I had not spoken to the other agent, or heard from them, I would draw up a cancellation notice, that the seller would sign saying if the buyers do not remove the inspection contingency the escrow is cancelled. This is an extreme step and would only occur if there was no communication from the buyer's Realtor.

In California if the seller does not sent a notice to the buyer about the contingency, then the escrow can proceed with the contingencies never removed. That would mean that at anytime the buyer could cancel by saying, "you didin't fix it". So as long as the buyers have not removed the contingencies, it would seem pointless to proceed with the escrow until the issue is resolved. If you goal is to get the home sold, then I would focus on finding out the problem and resolving it. If you are unable to contact them, then cancelling the escrow is the best option, because you want to re-market the property and get it sold, instead of holding out hope that they will eventually close. The real job of Realtors is in the escrow process, helping the parties to get to the closing table.

Hope this is helpful.
0 votes Thank Flag Link Sat Apr 5, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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