Can I sue the seller(bank) and listing agent in a foreclosure situation.?

Asked by k_bear, Traverse City, MI Thu Apr 24, 2014

I had an accepted offer to purchase a home via a 30 year mortgage. I paid the mortgage app fee, and proceeded with the inspection and bank appraisal, which is when it was discovered that the abandoned home had never been winterized by the seller, resulting in a non-functioning plumbing condition. My mortgage bank, as most would, declined to move forward with the mortgage. The seller is asking to cancel the purchase agreement since they cannot fix the issues at this time due to weather. Now I'm out nearly $2000.00 for services, travel, etc., and no home to buy. I want to recover these expenses in addition to my earnest money (which is not an issue).

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4
Terry McCarl…, Agent, Cape Coral, FL
Fri Apr 25, 2014
You can sue anyone you want to but your odds of winning a case such as this are probably next to nothing. Consult with a real estate attorney who can explain your options and odds of success.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Apr 25, 2014
KB in MI,
The following is not legal advise. I am not an attorney and I do not play one on TV.

You are correct, you are out $2,000!
You can chase that money with more money if you want.

You are not likely to receive any level of satisfaction attempting to sue a bank in a foreclosure purchase. Those documents you signed, and signed and signed, in effect stated you will hold the bank harmless for any and all things even when failure is clearly their negligence.

You should go ahead and pay an attorney, they are the only ones who can offer you legal advise, to show you those hold harmless statements you signed.

Whether you should do the happy dance or not depends on the cost of those plumbing repairs and the GREAT DEAL you thought foreclosures offer to home buyers. It would be a shame of you lost a good deal because you inspector is prone to hysteria when evaluation is what is needed.
0 votes
RonS, , Concord, CA
Fri Apr 25, 2014
You can sue anyone for anything in the U.S. The question is, will you win and more importantly, will you recover anything?

You had no contract with the lender on the foreclosed home. You had a contract with the seller, subject to lender approval of the short sale. The agents are not a party to the contract you had with the seller. You might as well sue the gas station attendant for looking at you the wrong way.

No one put a gun to your head to travel or spend money on services. Your transaction was contingent on certain things happenning or not happenning and certain conditions existing or not existing. You were unable to overcome those contingencies. You weren't damaged. You were actually protected from damage by the lender refusing to proceed with a loan based on issues expsed during the process. Be thankful and move on to the next opportunity.
0 votes
Dan Tabit, Agent, Issaquah, WA
Thu Apr 24, 2014
K_bear,
In America anyone can sue anyone for whatever issue they have. What no one can tell you is whether an attorney will take the case or whether a judge will find for you. The seller's obligation or capacity in some instances, to disclose is an issue. The bank never lived in the home and may not be aware of many issues. The listing agent should disclose any material facts they are aware of, but can you prove they knew and didn't disclose? Your inspection should have uncovered the issues for you and may have stopped you sooner, unless that's how you found out.
I wouldn't expect anyone else to be responsible for your travel or inspection expenses, it's generally considered the cost of doing business.
Now with all this said, it's up to you and whatever legal professional you trust to decide how and if to move forward. Buying bank owned homes is always a challenge and not advisable for many people who can't deal with the surprises that often come with them.
Best of luck and let us know what you decide and how it turns out.
0 votes
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