3 fixes when home seller neglects promised repairs

REThink Real Estate

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Oct. 6, 2011

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REThink Real Estate

Tara-Nicholle Nelson
Inman News™

Q: How far can you go back on a contract? Before the closing, the seller was supposed to fix certain outlets that the home inspector had marked. Well, call me an electrical idiot, but I eventually learned that the seller didn't fix them per the contract. Dumb me for not getting the free second walk-through inspection. I usually learn things the hard way. This is one of them. Any input would be helpful. This was my first home purchase. --Morganne B.

A: More than one thing went wrong in your transaction, from my perspective. Obviously, the seller should have had the outlets repaired -- it sounds like the outlets were possibly ungrounded or simply nonfunctioning. However, if that was in writing, you and your agent should have verified that the outlets had been repaired before you removed your inspection contingency -- and certainly before you closed the transaction.

Here's how you can think about -- and rethink -- these neglected repairs:

1. There's a no-return policy on homes. OK, that's not technically true -- there is a legal claim called rescission, but courts are extremely hesitant to do that, because real estate transactions just aren't that simple to undo.

Even if it's a big fix that needs to be done, unless there was a massive case of fraud on the seller's part about something that would have changed the normal buyer's decision-making about the house, or a seller's signature was forged or something on that order, the chances of "going back" on a contract, so to speak, are between slim and none.

In a court of law, in your case, things could go one of two ways depending, in part, on the laws of your state and the paperwork involved: A judge might order the seller to pay your damages (i.e., the costs of fixing the outlets) or not (you waived your contingencies and so might have taken on liability for the repairs, because you didn't insist on them being completed while you had your chance).

2. Ask yourself: Are the dollars worth the drama? If you haven't already had the outlets repaired, get 'em fixed or, at the very least, get an estimate. [Note -- First things first: if you believed the outlets were in good repair when you closed escrow, you might be able to get your home warranty company to cover the repairs, and you should contact them and inquire about coverage before you do anything else.]

Depending on how many outlets we're talking, chances are good you're looking at a few hundred bucks, max. Clearly, a couple hundred dollars is not worth the missed work and drama of a legal proceeding.

If, for some reason, the cost of repairs turns out to run into the thousands, you may want to consider a small claims court case against the sellers, but know going in that even small claims court cases can take tens of hours and hundreds of dollars to file, serve and prepare -- and that's not to mention the missed work of sitting in court for the proceedings and the drama and antagonism that comes with any sort of litigation, no matter how small.

3. Try easy. On real estate condition issues that arise post-closing, I always tell buyers that there's an easy way and a hard way to address the issue. And though our culture is very fond of telling people to try hard, I suggest trying easy first.

First off, call your real estate broker or agent and tell him what's going on. Dozens of times, I have seen these issues get resolved with a couple of phone calls and a faxed estimate or repair receipt.

Your broker might turn out to be your advocate in this situation, especially as there's an argument that he should have advised you against actually removing your inspection contingencies and/or closing the deal unless and until those outlets could be verified to have been repaired.

If that doesn't work, you or your broker should write the seller a note, through her broker, attaching the contractual documents in which she agreed to complete the repairs, as well as the electrician's receipt or estimate showing both (a) that the repairs were not done and (b) what the costs of repairs will be or were. Your note should then ask the seller to pay for these repairs.

The chances you'll recoup your repair costs by trying easy are probably quite a bit better than you think.

If not, assuming those costs don't quite rise to the level where legal action is cost-effective, you might want to chalk this up to tuition -- the cost you pay to learn a life lesson -- and be glad this lapse in attention to detail and double- and triple-checking didn't cost you much, much more.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.

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