Home buying question

[scotth89]

During the process of looking for a retirement property my parents were told by the current owner that the house had flooded. This was after they put the earnest money down and paid for an inspection. Now the current owner doesn't want to let them take the earnest money back.

Is this acceptable? I can understand it if the flooding issue had been disclosed, but it was found during the inspection. The realtor relayed the information from the inspection to the home owner and that was his explanation for the water damage.

Flooding from a big rain, not plumbing related.

[Tx_Wader]

LOL! No they didn't disclose the fact that it had flooded hence any money paid by your folks should be returned along with the money it cost them for the inspection.

[Hawkpuppy 1]

Are they still within the option period? If so, they get their money back. After that, if it was found in an inspection and the current owners did not know, that's why you get an inspection.

[LWD]

Was this in the seller's disclosure?

LWD

[texan4ut]

Depends on how they filled out the contract. Look on page 4 Section 7 if it is a standard TREC contract. There also should be a seller disclosure form where the seller is supposed to report any known issues.

[Devun]

Heya's Scott,

I would say it all goes back to the contract agreement that was signed by both the buyer, being (your Parents) and also the seller. Under the area of the contract that talks about the earnest money, does it say what requirements are met to lose it or regain it?

Typically there is a place in the contract (Seller's Disclosure) where the "Seller" says this happened or flood happened or termites ate up the place before and got fixed. and the Buyer initials beside those types of claims showing they acknowledge these things.

Also, was there a spot in the contract that was signed or initialed by your parents that says they are taking the property "as is".?

Also, What does your parents "Agent" say? The agent should be looking out for your interest especially in these types of situations.

I hope your parents get through this ordeal in their favor.

Best regards,

[cantexduck]

I would tell your parents to get a new agent , this is what they are paid to handle.

[Snakelover]

There is a check box on the TREC disclosure form for: ____ Previous Flooding

If that's not checked, the seller is probably going to lose the argument and have to refund the earnest money.

I'm not a lawyer or a realtor, just a guy that's bought and sold property several times.

[Bill M]

This is a disclosure issue and if it wasn't disclosed, the seller needs to compensate your parents for all of their expenses. If it wasn't disclosed their realtor couldn't have known either unless they have ESP powers so not the realtor's fault.

[scotth89]

Heya's Scott,

I would say it all goes back to the contract agreement that was signed by both the buyer, being (your Parents) and also the seller. Under the area of the contract that talks about the earnest money, does it say what requirements are met to lose it or regain it?

Typically there is a place in the contract (Seller's Disclosure) where the "Seller" says this happened or flood happened or termites ate up the place before and got fixed. and the Buyer initials beside those types of claims showing they acknowledge these things.

Also, was there a spot in the contract that was signed or initialed by your parents that says they are taking the property "as is".?

Also, What does your parents "Agent" say? The agent should be looking out for your interest especially in these types of situations.

I hope your parents get through this ordeal in their favor.

Best regards,

The contract does say "as is". I'm not sure if that matters or not. If they would have known about the flooding issues they would have never made an offer and signed a contract.

My parents realtor is saying their hands are tied since it was "as is".


If anyone has anything to add please let me know.

[scotth89]

I would tell your parents to get a new agent , this is what they are paid to handle.

I agree, in my mind that's where I'm laying the blame.

[ken]

The contract does say "as is". I'm not sure if that matters or not. If they would have known about the flooding issues they would have never made an offer and signed a contract.

My parents realtor is saying their hands are tied since it was "as is".


If anyone has anything to add please let me know.

The contract almost always says "as-is". That does not allow the buyer to lie on the seller's disclosure.

If my realtor wouldn't go to bat for me and threaten the seller with legal recourse I would get a new realtor*, then hire an attorney.

*In the spirit of full disclosure my wife is a real estate broker so it would be really uncomfortable and detrimental to my love life for me to fire my realtor.

[Bill M]

I agree, in my mind that's where I'm laying the blame.

If the seller failed to disclose the flooding, your parents realtor could not have known. Why would you think he/she would? How could they? Plain and simple, if the house had flooded before and the seller failed to disclose they are in default. Saying "as is" doesn't matter. Those types of contracts are negotiated all the time if still within the option period. Now if your parents want out their Realtor needs to make noise but understand that it may take an attorney getting involved. Like Ken, my wife deals with this every day. She is a Broker/Realtor but not giving this opinion.

[BigL]

Hopefully they are still in the option period and can back out and only out of pocket the option period money and the inspection.

I had undisclosed items come up during inspection and we backed out the deal to get earnest money back. They actually admitted that was broke when they moved in 5 yrs earlier and they never fixed it to our inspector. We gave them 2 choices how we wanted to move forward:
1. New offer with them paying for all repairs
2. threatened lawsuit to get option period and inspection money back along with them paying my lawyer fees if they lost for failure to disclose known defects.

They took option #1 and paid me $8000 at closing to fix everything found in the inspection. We closed about 2 weeks ago and repairs have already been completed.

Can your parents do the same?

[scotth89]

If the seller failed to disclose the flooding, your parents realtor could not have known. Why would you think he/she would? How could they? Plain and simple, if the house had flooded before and the seller failed to disclose they are in default. Saying "as is" doesn't matter. Those types of contracts are negotiated all the time if still within the option period. Now if your parents want out their Realtor needs to make noise but understand that it may take an attorney getting involved. Like Ken, my wife deals with this every day. She is a Broker/Realtor but not giving this opinion.

You're right she couldn't have known unless they told her. I'm more upset over the fact that the realtor doesn't seem to want to go to bat for them to get the money back.