NH P&S Section 13 ( Due Diligence ) A, B & C, Return of deposit / Escrow Funds

Michael Aronson
Agent
03809

Scenario: Home inspection reveals that inappropriate initial flashing installation, resulted in structural rot, mildew... As per P&S 13a, buyer requests input as to repairs to be undertaken. Seller moves forward w/HIS choice of repairs, w/o discussion w/buyer to seek agreement as to method of repair or remedy. Repairs are unsatisfactory to buyer. Home inspector & town code enforcement officer also felt that other approaches would have been more appropriate. Buyer specifically notifies seller that seller's request that buyer remain off site till repairs are completed and walls closed as well as refusing to engage in conversation as to what repairs would be conducted, by whom, using what approaches and materials..., via email to buyer's agent, forwarded to seller's agent was in conflict w/section 13 ( due diligence ). Seller refuses to remedy in a way agreeable to buyer, attempting to force close on property and refuses to sign Authorization for Release of Escrow. Thoughts?

Answers (6)
Michael Aronson
Agent
03809

With all due respect Tom, it was the BUYER that did the careful reading of section 13, first pointed out where the seller's choices and actions were out of contract with regard to unilaterally moving forward on non-mutually agreed to repairs, engaging in work which required permits and notification of the town code enforcement officer, neither of which was done. Installing windows in such a way as to void their warranty and repairs to structure in violation of the local code.

The REALTORS, both Buyer's and Seller's agents were focused on "the deal", NOT the hidden flaws in the home, facilitating clear and timely communication between buyer and seller,nor dotting and crossing the contractual i's & t's.

Just because someone is a "qualified" REALTOR, does not in and of itself mean that someone will do their job, or do it well, nor prevent them from being a total dolt. Nor. does my being on these pages as a "Real Estate Pro" mean I'm a Realtor, or, acted as one in this transaction.

You are certainly entitled to your opinion, and, I'm sure there ARE GOOD buyer's agents out there. Somewhere.

Sun Nov 23 2008, 05:19
Tom McGuirk, Br...
Agent
Hampton, NH

This scenario exemplies why experienced, qualified REALTORS facilitate not only the successful sale of a property but also work to protect the best interest of their client even when a sale does not close. Can you imagine what a nightmare this would have been (and the cost of attorneys) if either or both parties were unrepresented?

I applaud the Seller's Agent for educating his client (even though it was too late for this sale).

Sat Nov 22 2008, 19:31
Scott Godzyk
Agent
New Hampshire

Well i guess it worked out well then, glad i could help Michael.

Fri Nov 21 2008, 17:12
Michael Aronson
Agent
03809

Thank you both / all .. as things turned out, the seller's agent appears to have wisely advised the seller that he was in default, in having unilaterally undertaken repairs w/o any conversation w/the buyer. No "meeting of the minds" .. The contract was voided, and, the deposit returned ..

Fri Nov 21 2008, 09:00
Scott Godzyk
Agent
New Hampshire

The buyer and seller needed to agree to a remedy in writing before any work was performed. This would eliminate what you are facing now. The purchase and sales clearly states under A Seller shall have the option so as long as the buyer and seller AGREE to on the method of repair or remedy and B if buyer and seller CAN NOT reach an agreement with respect to repair or remedy this agreement shall be null and void and all deposits will be returned to the buyer.

It clearly states that the seller can not on his own come up with a repair on his own without the buyers agreement. Because the seller did this he is in default and the buyer can get his deposit back.

The listing agent needs to let the seller know he is in default and either do something to bring the buyer back into negotiations and find a remedy that is agreeable or give the deposit back and start over. If the seller refuses the buyer can ask the deposit be turned over to the clerk of courts for interpleader and the buyer will win and may go after the seller for damages.

i hope this helps Michael

Fri Nov 21 2008, 06:37
Dane Hahn
Broker
03833
FIRST ANSWER

Hi Michael,

Sounds like you are describing a classic tale of marginal communication between a greedy seller and a remorseful buyer. Realtors generally point out the transaction deposit is at risk should the buyer fail to perform--and the transaction is at risk should the seller fail to perform (in making or contracting for repairs as agreed to in writing--repairs that turn out to be incomplete or less than professional). Realtors are not lawyers but their wording requesting inspection related repairs or upgrades is key in this area, and must be clear. And at this time in the transaction, the agents will agree a large deposit is helpful in keeping the deal in place.

My experience is that in NH when a buyer chooses not to buy a property (for whatever reason) there are enough loopholes in our contracts to allow him to get out. (Expect a letter from the buyer's mortgage company, cancelling his mortgage approval, or a letter from his lawyer--at least.) Or if the deposit is small enough, (something mortgage companies have been allowing) the buyer will simply walk away.

My thought is to get the buyer and seller and their agents into the same room and see if this debacle can be worked out--because the next step is interpleader--real estate court--and that's expensive, time consuming and usually unfair to all parties--interpleader will freeze the seller's right to sell to others and often simply "cuts the baby in half".

Without knowing the whole story, I would say both parties need to refocus on making the transaction work.

Good luck,

Dane Hahn

Fri Nov 21 2008, 05:47

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