I tried to purchase a piece of property. Inspections revealed, major defects that were not disclosed & seller would not remedy.

Asked by Sherry Perry, BRYAN, TX Wed Aug 4, 2010

After lengthy and expensive research, the issues that were discovered would severely impact the property appraisal and use. Due to weather issues, our inspection process took longer than expected. We discovered everything the day our option period was expiring. In efforts to not lose our earnest money, we terminated but and emailed the agent that we were still wanting to negotiate to work out a solution that both sides would be happy with. The very next day, the listing agent called previous interested buyers & put 2 other offers on the table. However, the two other buyers had not been informed of the defects. As I am also an agent, I know that defects and previous inspections are suppose to be disclosed. This not being disclosed to the competeing parties meant we were not all on the same negotiating grounds. IN other words, the other buyers put in bids without knowing the defects. The seller went with another offer, even though ours was over full price. What would you do?

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Mike Kubica, Agent, Hendersonville, NC
Fri Aug 6, 2010
BEST ANSWER
Sherry: One other thing you might consider here --- if you're a BIC, and the other agent is not, you might consider calling the other agent's BIC as the other agent's firm will also have some serious liability here. If the other agent's a BIC, but not a principal, I might even go that route. If you're not a BIC, suggest that your BIC do this .
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J Mario Preza, Agent, Daly City, CA
Wed Aug 4, 2010
This is a somewhat complex question with many possible answers to address a myriad of potential issues. However, if the question purports to address what should the agent do versus do I have grounds for some sort of action, versus is the seller or the seller's agent committing a tort, etc. (you see where this could go, right?), then you'll get varying opinions from as many as might interpret what your intentions are, particularly if you ask an attorney. Taking just the superficial part of your question, unless you put on your purchase offer (contract form) that the seller would be obliged to correct findings from your inspections AND the seller signed agreeing to that, they are under no obligation to do so. If negotiation is what drove either party to do something, remember it's about quid-pro-quo. Your bargaining position becomes the weaker in light of other competing offers, and, although disclosure becomes an obligation, by law in most states, of the seller and/or the seller's representative(s) (agent, broker, etc.), if they decide to do something against their better judgment, if not the law, then they will have their own consequences as a result. However, you cannot expect nor impose that as a bargaining chip lest you want to also play by dirty tactics, which it doesn't sound like you do. Best case scenario -- move on, there are hundreds of houses that might better suit you, I've always found. Good luck.
1 vote
Mike Kubica, Agent, Hendersonville, NC
Wed Aug 4, 2010
Sherry: Depends on how much experience this agent has. He/She is definitely in violation of the REALTOR Code of Ethics and probably in violation of the RX RE Commissions rulers. If the agent is fairly new, you might take the opportunity to educate by pointing out that failure to disclose material facts could create some real problems with his/her license. If the agent is experienced and makes a habit of this type of think, I'd file an ethics complaint with the Board of Realtors (if he/she is a Realtor) and would consider a complaint with the RE commission. He/She is definitely not acting in the best inerest of his/her client as he/she is opeining the seller up for some litigation when the facts become know to the buyer.
As far as the sale you lost, there's not much you can do about that at this point unless the deal falls through.
1 vote
Sherry Perry, Agent, BRYAN, TX
Wed Aug 4, 2010
So the second part of my saga is that the very next day we submitted the contract written as the seller had previously agreed, thinking we would just accept things and give them what they wanted and we would take care of the problem. The problem was that the septic had a leak and was dumping fecal matter into the neighbors land, along with various code violations of being within 50 feet of a water source and a conventional system (which was basically a 55 gallon drum buried in the ground) was in clay soil which compounds the issue as the absorption rate is next to none. Removing the house would affect the appraised value, but we were willing to take the loss as we were interested in the land, and not the cabin. The following day we contacted the agent who reported that 2 other offers were now on the table. We found out later that offer #2 was represented by another agent, different broker and was full price cash offer with “as is” terms. 3rd offer was an offer that had financing but was represented by the listing agent. Agent #2 was contacted by the listing agent and told they went with the other offer, offer #3. I know that the seller has the right to do this – and moving on is our best option. It just kills me to think of what this buyer will go through – considering our inspections went to the county during our option period as we wanted to find out what we needed to do to fix things. The county said that they would be shutting the septic down. We did not care because that is what we were going to do anyway; we expected that we would be closing on the property.
Web Reference:  http://www.iclickhomes.com
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