Expert: John Hendricks - 8/8/2008

Question
My Wife and I are buyers. We recently offered and then accepted a counter-offer on a home and we were accepted by the seller. The home is sold As Is/ Where Is and we accepted based on the homes condition at the time of viewing/offer/acceptance. The home was listed as Pending
on 8/2/08. We were notified officially on 8/5 that we were accepted thus opening contract on the home. On 8/6/08 The Seller/Sellers Agent turned on the utilities so we can get an inspection done. A valve under the Kitchen Sink was open ( No Faucets Hooked Up)and The House completely flooded over a period of hours ruining the carpets in all 4 bedrooms completely soaking the entire Home Floor Area.The sellers agent said they were going to have a water removal team suck the water out ( Stanley Steamer or some other floor care company). This did not happen and now we are afraid the water saturating the carpets will further saturate the wallboard where the carpet meets the walls. We accepted the counteroffer based on an As Is Condition at that time. The home is no longer in that usable condition and could become worse. We are in beleif that if the carpets are removed promptly, the walls will be ok. Is the seller Responsible to return the home to the As-Is Condition we entered contract with? Prior to the water incident, The carpets were in great shape and we fully intended to use them. We are also concerned about possible further damage occurring. This puts us in a Real Bind because if we back out of this contract now, there will not be enough time to find another home, get accepted,and enter/close escrow prior to the 10/1/08 Elimination date of the Down Payment Assistance Program ( AmeriDream).We would rather the seller simply remove the ruined carpets immediately and adjust the home price accordingly. Can we force this issue?

Answer
Dear Kevin:

Thank you for your question, and once again I am sorry about the delay due to my move in Mexico.

You did not mention where the home you are buying is located. In California, when entering a contract, as long as you honor your commitments of the purchase contract, the seller is obligated to repair the damage to the condition the home was when you actually entered the purchase contract. I believe you also have the option to step out of the contract with no obligation to purchase the home if you so choose to do so.

If you choose to continue with the purchase of the property, make sure that you employ a licensed contractor to inspect, report, and recommend the repairs needed to correct any problems that may be a result of water damage. Prior to the close of escrow, you obviously would like to have the same licensed contractor to inspect the work performed to insure that your investment is secure. Due to the damage to the property due to the water, this should not be part of the inspection contingency that is part of your contract. The water damage repairs should be treated separately and should not be released until you are completely satisfied with the repairs.

I always recommend you contact not just the Realtor who represented you for professional advice on your options, but I would recommend you to ask your Realtor to contact the Broker/Manager of the real estate company in which they are associated. Ask the Broker/Manager to review the situation and make recommendations to you regarding your options. Take copious notes of all conversations this day forward, with all parties to this transaction in relationship to the damage and repairs. Take as many pictures necessary of the damaged areas and repairs for your files.

If you feel at anytime that you are not being represented properly under the circumstances, don’t hesitate to consult the best real estate attorney you can fine in your area to review all documentation, reports, and recommendations. The attorney will provide you all your options with the seller, as well as the representing real estate companies involved in this transaction.

I am a Realtor in the State of California and making recommendations based on your letter. Not being able to review all the documentation related to your transaction, I would highly recommend you review my suggestions with your Realtor, Broker/Manager, and/or an attorney prior to pursuing any further actions with your purchase of the subject property.

I hope this helped you, and good luck….

Warmest Regards;
John Hendricks