Agent Ethics / Sellers Disclosure Question for Flooding
5,374I have a house under contract. I am well past the option period. I visited the house yesterday, and with all the rain recently, there was minor flooding into the house (the water was about 2 inches above the threshold at the one door, and just about at the threshold level of the other door). There was nothing in the sellers disclosure about flooding issues. After talking with several different neighbors in the area, this particular property has a reputation of flooding. I had a contractor go out, and got a quote to rectify the flooding by installing gutters, French drains and revamping the slope of the yard of at about a cost of $20K. I had the house under contract for $40K. So I had my agent draw up termination, release of earnest money, and an amended offer to buy it at $20K factoring in the correction for the water issue. Here is the sellers agent response:"As always, I will relay your correspondence. I will suggest to my client that she not release the earnest money and expect your professional client to perform. At 20K I will own the house.professionly yours "So my questions to the community are this: 1) Should I expect to forfeit the earnest money, or should I expect to receive it back? I was under the assumption that flooding issues must be fully disclosed, and in this case, they were not. There were no comments on the sellers disclosure about any type of flooding issues.2) Also, did the agent cross the line with the comment of them owning the house at my revised offer price? And if so, what should I do about that? I am not looking to cause problems, but on the flip side, I am not looking to lose my earnest money either for a problem that should have been disclosed from the start, which would have impacted my offer to begin with.Any advice would be much appreciated.Regards,Mike
With that said, paragraph 10. Possession begins with the sentence "Seller shall deliver possession of the property to Buyer in its present and required condition,...." It seems to me, that on the "executed date", which is the "present condition" date paragraph 10 is referring to, and according to the Seller's Disclosure, this property was without any flooding or flood damage. Sellers are obligated to maintain the property during their ownership of it, which includes the time between the "executed date" and the "closing date". Also, and even MORE important, is Paragraph 14 Casualty Loss, which begins with the sentence, " If any part of the property is damaged or destroyed by fire or other casualty loss, after the effective date of the contract, SELLER shall restore the Property to its previous condition as soon as reasonably possible, but in any event by the closing date." It goes on to say that if seller does not restore and repair the property buyer can terminate and receive the earnest money, and there are a few other options listed. read paragraphs 10 and the entire paragraph 14 of your contract carefully! The answer to your problem is right there in the contract.
Do what the contract says to do.
Start by handing your bid to the seller, along with the termination and release of earnest money to you, per paragraph 14. The parties can either agree that the seller can fix it or terminate; or choose one of the other options listed in paragraph 14.
Your Realtor should have immediately turned to the contract for this solution.
The contract covers every detail. Read it. Consult it. There's rarely a problem where the contract doesn't already outline a solution.
Hope this helps.
Like (5)
DislikeEven though it's not morally right, There is no way to prove if the owner or agent new about the flooding even if they did know,now it's more of a he said she said kind of thing and almost in possible to prove.
As far as earnest money they should give it back but are not obligated to do so unless you prove they knew of the flooding.
All the agent was saying was your counter offer was really low and that if you could buy for that price he would buy it himself. He said it that way to get his point across that your offer was not even close to what price his seller would agree to sell the home at, nothing morally wrong with it.
I would steer you toward discussing this situation with your realtor and the broker. Based on that conversation you may opt to seek legal representation, if necessary.
Darby
2 answers
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