Expert: Jim Root - 1/4/2010

Question
My sister and her husband are currently having an issue with a home they put a bid on.  The agreement included a contingency that would allow them to back out pending a home inspection and also included a list of other things they wanted as part of their bid such as new carpet.  After the home inspection, it was found that the floor joists had been cut into to fit wires and other random electrical and plumbing for the basement.  Instead of small holes, they cut at least 3 sections in every beam, around four to five inches in size.  The cost to repair would be thousands of dollars.  They decided to ask the seller to fix the issue or else they wanted out of the contract and a stop work order was issued regarding the new carpet and the other items on the agreement.  The seller's realtor replied saying that there was nothing in the bid agreement about a contingency for the home inspection.  When my sister's realtor looked at the agreement, he noticed that it was there, however, the words "contingent upon home inspection" had been lightly crossed out, with no initials by either party.   Now the seller's realtor says he is going to file suit against them if they back out of the home.  Are they stuck with the house?  My husband and I recently purchased a home, and in every agreement we signed while bidding, it had a contingency for the home inspection and if we didn't want it, we had to initial it or else it wasn't binding.  However, we live in a different state and I don't know if it varies from state to state.  She lives in Virginia.  I feel bad because this is her first home and she was really excited and is now a worried mess.  Do you know what the law is regarding the home inspection contingencies?

Thank you!

Answer
MELISSA--

The laws governing Real Estate differ from State to State, but typical CONTRACT LAW usually prevails. As I'm not an Attorney, I cannot provide legal opinion,give legal advice or guidance or I could be accused of practicing law without a license.

My 30+ years as a Real Estate Professional tells me, though, that Contracts about Real Estate transactions MUST be in writing (NO oral/verbal agreements are valid) and that all parties to the Contract MUST be in TOTAL agreement (Changes to an Offer MUST be signed or initialed by both Buyer AND Seller to be valid)

I THINK that your Sis and her Hubbie have every right to back out of the deal, but as I'm NOT licensed as an Attorney OR a Realtor in Virginia,I CAN'T SAY FOR SURE. They're going to havbe to have their Realtor (and his/her Broker) get tough with the Listing Agent--and a Letter from an Attorney usually helps in cases like this!

GOOD LUCK!

--JIM