If I contract to purchase a home and it is agreed by the bank but after inspection we find major problems can i get my escrow money back?

Asked by sapir.marlene, Cherry Hill Township, NJ Mon Aug 27, 2012

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Marsha Bowen…, Agent, Livingston, NJ
Thu Aug 30, 2012
Hopefully you are working with an attorney on this transaction, I've heard quite often in the Southern part of NJ that not all buyers hire attorneys to represent them. You should go over your contract with an attorney for legal protection.

In terms of a short sale, the sooner the inspection is completed by the buyer, the better.
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Francesca Pa…, Agent, Manasquan, NJ
Wed Aug 29, 2012
Usually when you agree to a contract with a bank, the condition is "as is". My best advise to you is to do the home inspection prior to making the offer . . . the best offers on distressed properties are those without ANY contingencies. . . . I recently made an offer in a multiple offer situation for my own purchase . . . seller chose my offer due to my willingness to take the risk of bearing the expense of the home inspection. I adjusted my original offer price accordingly.

Francesca Patrizio, Broker Sales Associate
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Mary Petti, Agent, Edison, NJ
Tue Aug 28, 2012

Most contracts have some kind of "inspection contingency clause". Sometimes additional contractual provisions regarding inspections are included in the attorney reviw phase as well. Read your contract then discuss your options with your attorney based on the specifics of YOUR inspection, and additional contract clauses, and concerns about the findings.

This is a legal question and Realtors are forbidden to give legal advice.
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Larry Sarlo, Agent, North Wildwood, NJ
Mon Aug 27, 2012
Read your contract approx paragraph 7 line 126 on most contracts in camden/Gloucester county, Burlington could be Paragraph 20... But it will say inspection contingency clause.or inspection repairs The amount of money stipulated there is what will guide you to your answer...

Also it sounds like you have a short sale contract, but you did not mention this. If you have a short sale, then you should have a short sale addendum attached to the contract also.

Depending which addendum is used, look for a paragraph that mentions money for inspection again. The title of the paragraph may read "Property and conditions" or something like this. there will be a repair amount stipulated there also. The addendum changes supersedes the contract provisions in most cases, unless you made other changes along the way.

If you cant read the contract or dont understand it, have an attorney read it for you. time is of the essence in either case so act on this ASAP.

the problem you are experiencing is exactly why I like short sale buyers to get their inspection done before the bank makes a decision. There is a three part reason for this also. This is only one part so you are not wasting your time on a property you will not buy or dont want to buy.

There are other reasons I do this also that benefit the buyer greatly.

Good luck...

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Larry Sarlo
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Deborah Madey, Agent, Brick, NJ
Mon Aug 27, 2012
That depends upon the language of your contract and if both you and the seller agree with the assessment of the inspection report.

While my comment does not speak specifically to your contract,...... many contracts contain clauses that state that if there are substantial defects in the property revealed through the inspection process that were not previously known, and the seller is unwilling to correct....the buyer may terminate the contract.

I don't know what your contract states, and nor am I qualified to interpret the legality or enforceability of it, even if I did have a copy.

Sometimes, what a buyer considers a defect is seen by a seller as an imperfection without cause for termination.

If you are in contract, discuss with your agent and attorney. If not yet in contract, and this is a concern, thoroughly discuss with your professional team so the contract can speak to this in terms which you are comfortable. Keep in mind that if the bank will not agree to your terms, you have no deal.
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Alex Kushnir, Agent, Monmouth, IL
Mon Aug 27, 2012
Your question is legal and needs to be answered by your attorney
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