Expert: Karyn Foley - 2/9/2008

Question
Hi I'm Spencer and my wife is Gretchen. We live in Richmond,Ky. My wifes house she owned before we married is for sale and we have gotten a contract on it with a lady who is using her uncle as her agent (and the co he works for) to communicate to our agent. She has gotten a home inspection on it and now wants to back out of the deal because of things listed on the home inspection. My wife and I are 100% positive the inspector never did a full inspection and falsified some of the info on his report. Such as termite tubes he supposedly saw in the back, right and left sides of the house on the sill plate under the house in a very small crawl space. Im positive he never crawled in to actually look because I did 2 days after he was supposed to and every cob web from the day it was built was in there and none of them were disturbed. The home inspection report was so poorely written that my wife couldnt read it and she's a language arts teacher for 6th graders. We also recieved a hand written letter from someone on the buyers side that stated assumptions that the air unit could be defective and may need replacing and wasnt able to check it, but on the home inspection report all that was checked was the box for wasnt checked. What were wondering is if we have and legal recourse to make them finish the deal and but the house? Also we would like to know if we can keep the $500.00 escrow that the buyer put down if they dont buy the house and what we need to do to make sure we get the money or part of it. We recieved a letter from her broker saying he was going to release the money back to her in 60 days unless we got legal help?? We are stumped and mad and dont know what to do and dont know who to contact, do we need a lawyer? will it cost more that the $500 we might get from them?? we already told her broker that we were going to file a complaint against the home inspector with the state board, and even wrote them a letter saying we would pay for a termite inspection ourselves and if it turned up nothing then we continue with the sale as is and if it did we would lower the house price and she could get a termite spraying, so were trying to be proactive with them, but they dont want to hear it.One last thing there was no stipulation on the contract that the sale was contingent on a home inspection or the results of a home inspection. We would love and help ypu could give us, sincerly Spencer and Gretchen Tracy Richmond,Ky. My email is brandylane33slt@yahoo.com

Answer
I am so sorry you are going through such an awful situation.  It is a shame that it is happening to you.  I do not have a copy of your contract, but it really should have had all the contingencies listed.  There is usually a period for contingencies, during which the buyer can back out.  However, some of the items you mentioned are material facts that could have reasonably influenced a potential buyer not to buy the house had the buyer known about these in advance.  Now, these facts are known, and your buyer can probably just decline to continue and purchase.  I suggest you don't even worry about this buyer, this buyer is trouble, and there is no way the selling to this buyer would turn out productive.  Give back that deposit, put this buyer behind you, and go forward and look forward to dealing with some one better.  Now, in your state you may still have to disclose this home inspection report to your next buyer; your agent can tell you what is mandated where you live.  If you feel the facts are not correct, I suggest you hire an inspector for a pre-sale inspection.  This way, you know what is truly going on with defects and/or maintenance that should be attended to.  Your new buyer is still entitled to his own inspection, but your inspection can give you a better heads-up on what you may wish to handle prior to putting it back on the market, and what you may have to disclose to the next buyer.  If your own inspector finds that the original inspector was not honest, then you may have recourse against that original home inspector - if you can prove fraud rather than just plain lack of knowledge - but probably not any recourse against the buyer.  You can investigate further with a real estate attorney, but it is not worth the money you would have to lay out or worth the aggrevation.  You may even wish to hire your own termite inspector, and take care of the necessary work how, before your next buyer comes along.  Stop beating yourself up and just drop these horrible people.  They are not nice, probably not honest, and will only causee you grief now and even after the closing.  The only thing I am concerned about is why your buyer's deposit is with the buyer's broker?  It should be in a neutral account, an escrow account, with a title company, et cetera, requiring your signature as well as the buyer's signature to release it.  Now, your state laws regarding deposits may be different from my state laws, but you should find out as soon as possible.  Where is your agent during this hassle?  Are you getting support and the necessary facts from your agent and why and how to proceed?  Your agent should be advising you; that is your agent's fudiciary responsibility.  Please let me know in what direction you are going to go, how your agent is assisting, and so forth. I am not comfortable with your situation.  Good luck,Karyn Foley