Is there any way to back out of a purchase after offer is accepted?

Asked by Chaundra Davis, Reynoldsburg, OH Tue Jun 28, 2011

A friend of mine found a home and after inspection, put in an offer. There is a bad mold issue in the basement and she was hoping to get a repair loan to fix it. The seller accepted the offer, but they were denied improvement money. They now have an accepted offer, $ for dn pmt, and no $ for repairs. They can't live in the house with the mold...is there any way out of purchasing this home?

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James Deskins, Agent, Worthington, OH
Tue Jun 28, 2011
BEST ANSWER
Why would your friend put in an offer AFTER the inspection? That takes away the home inspection contingency in the contract. Your friend got bad advice, that's not the way we do it around here. I can tell you this: once the bank gets wind that there is mold in the property they won't loan your friend the money for the house. Banks are deathly afraid of mold. If the banks knows about the mold the deal is over.....

Tell your friend to get an attorney, pronto, or to talk to his agent, if he has one. If it's the seller's agent....he's probably out of luck..... If your friend does NOT have his/her own agent you can have them call me and I can try to help.

FYI, I am NOT an attorney and this is NOT legal advice.

Jim
0 votes
Chaundra Dav…, Home Owner, Reynoldsburg, OH
Sat Jul 2, 2011
Thanks for your input everyone. They are still going through with the purchase and have borrowed money in order to fix the mold. Just to clarify, this was not a foreclosure, HUD repo, or cash sale and I am completely baffled their agent would steer them down this road, or that they would go follow. Not to mention that the seller obviously could care less that he is unloading a home with mold and actually had the audacity to counter when they bid the asking price. There are so many missteps in this situation it is ridiculous. But these are also stubborn adults so... Thanks again
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Jeffrey Cotn…, Agent, Canal Winchester, OH
Sat Jul 2, 2011
I agree with everything that has been said, they need to hire an Attorney ASAP. 2nd thing is they shouldn't use the agent that got them into this mess for anything else. I don't understand the time line and the inspection before the offer. It really pays to follow the CBR contract. If everything would have been completed in the time line, Walking away wouldn't have been an issue. Understand as realtors, we shouldn't and can't give legal advise. The attorney is the only option for your friends. Good Luck!
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Kenneth Brit…, Agent, Columbus, OH
Wed Jun 29, 2011
If the appraisal comes back unsatisfactory to the lender, then the lender may cancle the loan. If not, then you will need to hire a Attorney. The inspection days in a contract is Very Very important !! Good luck.
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Don Corson, Agent, Columbus, OH
Tue Jun 28, 2011
C-
First, I'll echo some others here w/ the advice to have an attorney review all the contract paperwork. Is the house a bank owned foreclosure? It might make a difference if it is.
Your friend had the right to an inspection, at which point he should have done his due diligence to determine the extent and cost to remedy the mold. During that inspection period, he could have walked away and gotten his earnest money deposit back, if he wasn't liking what he saw.
Best of luck to him.
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Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Tue Jun 28, 2011
Are they buying the property for cash? No lender is going to finance a property with active mold in it...that alone should release them from the contract if there is a financing contigency. If, however, they are buying for cash why not consider an FHA 203K renovation loan instead. Find a local (important) 203K specialist and get some counsel from them.
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Chaundra Dav…, Home Owner, Reynoldsburg, OH
Tue Jun 28, 2011
Gerard, they DID have their own agent and they did know about the mold. I fear that this is going to end up being a $155,000+ lesson. Their agent basically let them bid on a home that they were gonna pay to repair, which is ridiculous considering the amount of money they had to spend. They could have just found another property. The mold was an issue that developed over the course of the home being empty and a faulty sump pump. I guess they liked the home and the area so much, they were willing to pay. They applied for a home improvement loan, but were denied( this is all 2nd hand info so..) But as I type this, I realize they made this decision and they may have to live with it.
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Gerard Carney, Agent, Spring Hill, FL
Tue Jun 28, 2011
When did you find out about the mold? there is a section in the contract that allows for inspection and then time to decide or negotiate repairs for items found in the inspection! Does your friend have their own Realtor in this matter or are they just using the seller's Realtor? I can see this happening if there were a seller and a buyer's Realtor involved! Now it is going to cost you an Attorney to get out of this mess and get one soon or you will be owner of a moldy house!
0 votes
Sergio Herna…, , Naples, FL
Tue Jun 28, 2011
Ask a lawyer to review the sales agreement and thoroughly investigate the entire matter.
Web Reference:  http://www.golftobeach.com
0 votes
James Deskins, Agent, Worthington, OH
Tue Jun 28, 2011
Hey C, if their agent won't help tell them to go straight to the agent's broker. Sounds like that agent either didn't know or didn't care. Unfortunately, the most important decision you can make as a buyer is to hire the RIGHT agent before you do anything else.
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Chaundra Dav…, Home Owner, Reynoldsburg, OH
Tue Jun 28, 2011
Thank you all for your input. I have a real issue with the fact that my friend had a realtor, but that this person didn't act as an advocate for her, allowing them to make an offer w/o first insuring that all financing was covered, including money for repairs. I was under the impression that they already had a home improvement loan. Otherwise I would have told them to RUN! I'm just hoping we can find them a way out, even if they can get the repairs included in the price. I feel like something shady has happened, I just can't put my finger on it. I would just hate for them to have to have this home and not be able to afford to make it livable. Especially a $155,000 home.
0 votes
Christopher…, Agent, Tarrytown, NY
Tue Jun 28, 2011
Hi, the offer should be made with a home inspection contingency. In NY you can back out until the contracts are fully executed which is always after an inspection. Find out if a binder was signed or if it was a verbal offer and acceptance. If a binder was signed you will have to read the language in it or contact a real estate attorney.

Chris
Web Reference:  http://raveis.com/chrispagli
0 votes
tom roberts, Agent, powell, OH
Tue Jun 28, 2011
C they should of used a Realtor,mold will stop a deal every time
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Tim Moore, Agent, Kitty Hawk, NC
Tue Jun 28, 2011
Hopefully you are using a buyers agent, they should be able to better advise you. Are you in the inspection period? You can often ask the sellers to fix or remedy a problem and if they won't you can walk away if you are in that time frame with no penalty. You can ALWAYS walk away, but you might loose the deposit money. Talk to your agent for advice. If you have no agent or are dealing with the sellers agent, tell them you want out because there is mold and either they fix it or you walk away. See what they say.
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