Property Escrow Dilemma
- Thread starter 0260n3
- Start date
[This message has been edited by ck (edited 12 March 2003).]
I have suspected the seller may not want to go through the treatment, however, they will eventually have to with the next buyer.
What I don't understand is why are they making it this tough, it seems that they want to back out of the deal.
what I want to see if some way of keeping them in the transaction, and if they backout, I want there to be some sort of penalty assessed on their part, and not allowing them to walk away for free.
[This message has been edited by 0260n3 (edited 11 March 2003).]
What I don't understand is why are they making it this tough, it seems that they want to back out of the deal.
what I want to see if some way of keeping them in the transaction, and if they backout, I want there to be some sort of penalty assessed on their part, and not allowing them to walk away for free.
[This message has been edited by 0260n3 (edited 11 March 2003).]
I assume that you are getting a mortgage on the house. If so, tell your lender that the house shows proof of termite damage and that there is presently signs of live termites. This can do two things for you: First, the lender will not give you the loan, therefore you have a way out of the contract without losing your deposit. Second, the lender will get in touch with the seller and demand that the proper termite treatment is done. If you have copies of the inspection reports you have no problem. Two out of three is a legimate reason for walking away from the deal. But, if it's too importang for you, then you need to get a termite inspection done with you and your realtor present. Do not let the inspection get done without being there in person, period!
If this were me, I would not buy this house if it presently shows signs of active termites. Walk away and don't look back.
If this were me, I would not buy this house if it presently shows signs of active termites. Walk away and don't look back.
thanks so much for the advice.
wouldn't tenting, or local treatment take care of termite problem?
The house is less than 5 years old, so i suspect the problem is not extensive, then again, that's just my personal guess.
[This message has been edited by 0260n3 (edited 11 March 2003).]
Q-1 Is the home your buying have going to be financed via FHA. Is so you do a an out based on past inspections.
Q-2 Where have active termites been found at, surface exterior siding or is there evidence of activity in framing.
I would be concerned that a 5 year old home has termites if found in framing. When constructed CCA treated lumber should have been used at all areas that are near surface grade. Where were they found at ? If its a minor cost in relationship to the overall value of the home only you can accept whats going on if you allow it. Sounds like the seller is an idiot to begin with and based on what they are doing and your certainly within your rights if the contract was done correctly. I only say the above mentioned things b/c i'm a real estate appraiser on the residential side and their is no way your bound by this if the contract was done right and/or its an FHA loan b/c a appraiser would have to dis-close those facts which would effect the loan value & marketability of the home for loan purposes.
Q-2 Where have active termites been found at, surface exterior siding or is there evidence of activity in framing.
I would be concerned that a 5 year old home has termites if found in framing. When constructed CCA treated lumber should have been used at all areas that are near surface grade. Where were they found at ? If its a minor cost in relationship to the overall value of the home only you can accept whats going on if you allow it. Sounds like the seller is an idiot to begin with and based on what they are doing and your certainly within your rights if the contract was done correctly. I only say the above mentioned things b/c i'm a real estate appraiser on the residential side and their is no way your bound by this if the contract was done right and/or its an FHA loan b/c a appraiser would have to dis-close those facts which would effect the loan value & marketability of the home for loan purposes.
Here is the response from one of our Senior escrow officers...
[Carnutz]I am in the midst of my escrow period with close of escrow coming up fast in few weeks. The seller has ordered 3 separate termite inspections on the house. First one determined that there is termite, but inconclusive as to the extend of the damage. Seller did not want to pay extra (~$300) for further inspection
[Dave Shean] the contract usually addresses this issue that if Buyer requests further inspection and no further problem is found the Buyer pays for the further inspection and the relates costs of opening up the walls etc. etc. and the Seller pays the cost of opening and repair if there is further problem
[Carnutz] instead they had a second inspection company come in.
[Dave Shean] The Seller can get as many reports as he wants. I would be interested if the second and third termite company were advised of the previous reports or did the Seller remove the legally required posted notice on the property.
[Carnutz]The result comes back positive on termite, and they recommended tenting the house as treatment (~$2000). Seller got a third inspection after the second result, and it comes back negative on termites.
[Dave Shean] The Buyer should have received copies of all three reports. I think the Buyer should call the second and the third termite companies and get detailed information as to how it can be a problem for one and no problem for the other.
[Carnutz] I have my suspicions that the seller and the third inspection know each other, and they worked out something behind the scene to produce the inspection report to show clean record on termites.
[Dave Shean] It would not be unreasonable for the Buyer to contact the State Pest Control Board and ask about the three companies and ask them what they recommend.
[Carnutz] My suspicion is that they pay $60 for an inspection to save ~$2000 on treatment cost.
I like to know what my options are. I have requested to have a forth mutually agreed inspection at split cost between seller/buyer, and have seller abides by whatever results that come of it. The seller refused by standing with the result of the third inspection report.
[Dave Shean] Sometimes it is better to walk away from a potentially bad problem. Depending on when copies of the report(s) were delivered to Buyer and when his time clock expired for approval or disapproval of those items he may not have a leg to stand on. The Seller is/was/may have been obligated to provide Buyer with a clear report. It took him three companies but he did. The Buyer during his inspection period needs to provide the Seller with the disapproved items or the items that Buyer is requiring be repaired in a timely manner according to the contract. It would also not be unreasonable for the Buyer to contract with his own termite company, at Buyer's expense approximately $75 to $125 and provide them with copies of the other three reports and see what comes out. Then he will be able to negotiate based on facts not feelings.
I don’t want to walk away from this transaction, as I have invested quite a lot of time/energy, and I also already stand financial lost if I walk away as I have large sum of down payment sitting in my checking account waiting for close (lost of interest
[Dave Shean] not a significant loss at today's rates in my opinion
[Carnutz] and other cost that associated with inspection, escrow ..etc).
[Dave Shean] This is chicken feed when compared to the potential personal time away from job and family, cost and legal expense if the problem is worse than anticipated.
[Carnutz] I do not want the seller to be able to get out of the escrow by some stupid contingency and walk away scott free.
In another e-mail, he suggested to read his comments and then contact an attorney in case the seller needs some encouragement to reconsider..
[Carnutz]I am in the midst of my escrow period with close of escrow coming up fast in few weeks. The seller has ordered 3 separate termite inspections on the house. First one determined that there is termite, but inconclusive as to the extend of the damage. Seller did not want to pay extra (~$300) for further inspection
[Dave Shean] the contract usually addresses this issue that if Buyer requests further inspection and no further problem is found the Buyer pays for the further inspection and the relates costs of opening up the walls etc. etc. and the Seller pays the cost of opening and repair if there is further problem
[Carnutz] instead they had a second inspection company come in.
[Dave Shean] The Seller can get as many reports as he wants. I would be interested if the second and third termite company were advised of the previous reports or did the Seller remove the legally required posted notice on the property.
[Carnutz]The result comes back positive on termite, and they recommended tenting the house as treatment (~$2000). Seller got a third inspection after the second result, and it comes back negative on termites.
[Dave Shean] The Buyer should have received copies of all three reports. I think the Buyer should call the second and the third termite companies and get detailed information as to how it can be a problem for one and no problem for the other.
[Carnutz] I have my suspicions that the seller and the third inspection know each other, and they worked out something behind the scene to produce the inspection report to show clean record on termites.
[Dave Shean] It would not be unreasonable for the Buyer to contact the State Pest Control Board and ask about the three companies and ask them what they recommend.
[Carnutz] My suspicion is that they pay $60 for an inspection to save ~$2000 on treatment cost.
I like to know what my options are. I have requested to have a forth mutually agreed inspection at split cost between seller/buyer, and have seller abides by whatever results that come of it. The seller refused by standing with the result of the third inspection report.
[Dave Shean] Sometimes it is better to walk away from a potentially bad problem. Depending on when copies of the report(s) were delivered to Buyer and when his time clock expired for approval or disapproval of those items he may not have a leg to stand on. The Seller is/was/may have been obligated to provide Buyer with a clear report. It took him three companies but he did. The Buyer during his inspection period needs to provide the Seller with the disapproved items or the items that Buyer is requiring be repaired in a timely manner according to the contract. It would also not be unreasonable for the Buyer to contract with his own termite company, at Buyer's expense approximately $75 to $125 and provide them with copies of the other three reports and see what comes out. Then he will be able to negotiate based on facts not feelings.
I don’t want to walk away from this transaction, as I have invested quite a lot of time/energy, and I also already stand financial lost if I walk away as I have large sum of down payment sitting in my checking account waiting for close (lost of interest
[Dave Shean] not a significant loss at today's rates in my opinion
[Carnutz] and other cost that associated with inspection, escrow ..etc).
[Dave Shean] This is chicken feed when compared to the potential personal time away from job and family, cost and legal expense if the problem is worse than anticipated.
[Carnutz] I do not want the seller to be able to get out of the escrow by some stupid contingency and walk away scott free.
In another e-mail, he suggested to read his comments and then contact an attorney in case the seller needs some encouragement to reconsider..
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