04/26/2008We have a signed contract by both parties to purchase a home, but do we have any worries?
- We are the buyers, we have a signed contract and earnest money has been paid. Less than a week before our whole home inspection, the owners while cleaning up caught the house on fire. The damage is moderate. They filed an insurance claim and the repair work has begun. We still love and want the property. During the repairs to the damage alot of stuff is going to be replaced to completely new, like doors, roof, hardwood flooring, carpet etc... All this seems too good to be true to us and wondering if since we did not close by the date on the contract due to not being able to inpsect the property or because the bank would not close on the property in its state at its damaged value,,,,Do we still have a binding contract? Is there any way that the sellers could not sell us the property?
- Best Answer:I honestly can't say about your state, but in Colorado, here's what happens.
1. The Sellers must keep insurance on the home while it is under contract.
2. If there's any damage to the home under 10% of the contracted sales price, the Sellers are required to have such damage repaired back to the same condition as when you put the home under contract.
3. If the damage is over 10% of the contracted sales price, then YOU have 3 options: 1. cancel the contract and walk away; 2. require the Seller to do the repairs back to the original condition (or better); or 3. continue with the sale, take the home "as is," and have the Sellers sign over their insurance proceeds check. You will then be required to do the repairs.
Don't forget, the Sellers were selling for a reason. I'm pretty sure that they will not be changing their mind just because there are new fixtures and roof, etc. in the home.
You should be pretty secure in your contract, and as for waiting for the Realtor to bring you the amendment pushing out the closing date, just call him/her and ask why it's taking so long.
As for the law student, I would keep my opinions to myself at this point. Are you studying to be a Real Estate Attorney? Have you bought and sold a few homes? If not, maybe it would be best for you to read and learn a few things. There are some good answers on here, and there are some really bad ones. It's easy to figure out which is which.
Good luck!
- Answer:You should be in contact with your real estate agent. If there is no agent, what is wrong with asking the seller? You have every right to know when the repairs will be done. It would be nice if they would let you have a choice in carpet & paint selections. If it were me I would ask my questions infering I know we still have bought your home, we just need to know when we can close & take possession.
To the law student...the original poster said the owners & their insurance company are doing repairs.
Good luck.
- Answer:Of course anything can go wrong at any time. That's what lawers are for.
- Answer:Aren't you being advised by a Realtor? If so, why aren't you asking them? If not, why not? People, people, people!
While I can't address what your contract states, or what the laws are in the state you are buying in, chances are once the repairs are complete, you can close with no additional worries. You may have to write an amendment with a new closing date and both parties sign it . Then close as usual.
If the property had burned to the ground, you could have walk away. But there is still a binding contract in place.
Best of luck!
- Answer:I can't offer legal advice because I'm only a law student, so I can only summarize parts of my readings. You will be best to consult an actual attorney in the jurisdiction you reside in, or in the jurisdiction of the house (if different than your state of residence). A contract is formed when there is an offer, acceptance, and consideration. Your question is slightly different, however.
Some states say that unless the contract specifies otherwise, the buyer bears the risk of loss or damage to the property occurring between the contract date and the closing date. Some other states provide that the risk of loss is on the one in physical possession, unless prior to the loss there has been a legal transfer of title to one not in possession.
In other words, the current owners MAY have a duty to repair the damages in order to sell the house. The state MAY also require the seller to sell the house once your offer has been accepted. I don't know what state you reside in, and even if I did, I can't dispense legal advice.
Also, as a general rule, you should be skeptical of accepting legal advice over the internet. You should always contact an attorney if you have legal problems.
[This message does not provide any legal advice and you should consult an attorney for your legal problems]