house under contract, sellers want to modify contract.

General Real Estate Investing
1

we have a house under verbal contract (this is for our personal residence, so not an investment property) and the sellers are supposed to sign tomorrow. but now my agent calls and says they want to write in a statement on the contract to the effect of “they won’t be responsible for any repairs”. my agent says that of course if the home inspection brings up any safety issues then they would have to fix them.
the sellers want to do this because they feel like they are giving us such a deal on the house… i say, if you didn’t like my offer then you shouldn’t have accepted it.

I am going to the agent tonight to get the statement they are putting in there in writing. so i can look it over and see exactly how it is worded.

my question is… isn’t this already written into contracts? i thought you couldn’t get out of a contract unless the inspection comes up with a safety issue… so if the inspector finds 3 things wrong with the house that aren’t safety related… say the garage needs repainted, or whatever. then you would have to live with it… iyou could ask the sellers to paint it or split the cost, but they wouldn’t have to right? they could say, live with it.

once i see the statement tonight i will post it, but wanted to get an initial response, because i don’t want this to waive my rights in the event a major expense is un-covered.

2

A verbal contract isn’t binding. Did you present a written offer? Do you have any contingencies?

3

contegent on home and radon inspection.

this is how they worded the amendment on the contract. “the sellers are not responsible for any modifications or alterations that may arise from the home inspection”.

i told my agent i was not comfortable with that statement because it may limit or negate our rights under the contract if the home inspection finds major safety issues or radon exposure.

the contract states " Defects: if the inspections disclose any defects in the property, buyer shall notify seller in writing of the defects prior to the expiration of the inspection period. for purposes of this contract “defects” do not include minor, routine maintnance and repair items not affecting safety and habitability; or matters disclosed to buyer in writing by seller before presentation of this offer; and seller shall have no obligation to repair any such items unless specifically agreed in writing"

i would think this would cover the sellers intention of writing in their amendment.

4

They don’t want to pay for repairs. You either walk away or they offer a discount to compensate you for the repairs. You don’t lose any of your rights and they don’t have to make any repairs with either version. I would have a problem if their intention is to force you to buy the property even though there are undisclosed, non-trivial repairs.

5

we striked it out of the contract. if they have any problems with the way the contract is written then they can reject it.

you are right they don’t want to pay for repairs since they think they are giving us a deal.
i think we are both covered under the terms of the contract. if they don’t want to pay for repairs then they can just tell us that up front and not write in an amendment to the contract.

thanks for the quick response BLL

6

Have you walked through the property? Did you see anything that you would want the seller to fix if you bought the property the agreed price?

If not, then the purpose of your home inspection is to discover whether there are any hidden defects that may materially affect the value of the property or the health and safety of the occupants.

If there are hidden defects that would be costly to repair, then you have three options. (1) Ask the seller to make the repairs as a condition of settlement, (2) Ask the seller to reduce the sale price to match the cost of the repairs, or, give you a repair credit at settlement, and, (3) Decide to withdraw your offer and walk away from the deal without penalty.

Unfortunately, we don’t have your contract in front of us and can’t see all of the terms in the contract. The seller’s addendum is saying that option one is off the table If this is acceptable to you, then you need to add language to the addendum that preserves option 2 and 3. Your agent should have boilerplate clauses in his computer that s/he could use to add these options to the seller’s addendum and present it back to the sellers.

As I see it, the sellers don’t have any extra money or don’t want to spend any more money on the house. Their addendum says just that. It supercedes the language in the basic contract that says they won’t have to pay for anything minor or cosmetic. The sellers are sidestepping any potential disagreement over what is minor or cosmetic and just won’t pay for anything at all, even if something major is discovered.

You seem to be comfortable with accepting the seller’s addendum since you say that is what the original contract says anyway, so why walk away if you think you have a good deal? If you don’t think there is any major hidden defect that would make you walk away anyway, why not make a counteroffer with the extra language in the addendum?

In the event there is a discrepancy in the language between the basic contract, contract modifications, and addenda, there is an order of precedence. At the bottom is the printed basic contract. Anything that is written in hand in the basic contract (perhaps in the special provisions section) supercedes whatever is printed in the basic contract. Addendums supercede anything in the basic contract. And finally, anything handwritten in the addendum supercedes anything originally printed in the addendum.

Just to reinforce the point that has already been made, verbal real estate contracts, or verbal acceptances of written contracts, are not enforceable. To be enforceable, the contract must be written and signed by both parties.

7

we did walk through the property and did not see anything that needed fixed from the walk through.
we have not rescinded our offer. we merely struck their addendum off the contract.
they can accept it like that… or there are other deals to be had out there.
My major concern with starting this thread was if their wording could possibly waive our rights if a major problem is discovered.
but you believe it does not, even if we left that addendum in the contract and the home inspection found something, we could still walk away.
that is good to know, now we will see if they sign the contract.

8

You misinterpreted what I said.

We don’t have your contract in front of us and don’t know the full impact of the seller’s addendum. What I said was that if the seller’s addendum is acceptable to you, then you need to counteroffer with more language in the addendum to add clauses that preserve your right to walk away without penalty if your inspection discovers something major that materially affects the value of the property, or, to renegotiate the contract price.

9

Thanks Dave T
i did generalize a bit in my response. i appreciate the quick responses to the question.