We are buying a home. The sellers accepted our first offer. The septic didn't pass inspection. Who pays repair

Question

The sellers want us to pay half of the septic reconstruction. They announced this after our loan was processed. We were not included in any decisions with the septic design or price (we attempted to communicate with the sellers' agent). This bomb was dropped on us 4 days before the sellers wanted to close! Our contract states that they can choose to repair, reduce the price, or do nothing and we can get our hand money returned. We want the house but cannot afford the $7,000.00 additional cost. The sellers stated that they wouldn't have accepted our offer if they were aware of their home's necessary repair. We offered $8,000 less than asking price. They accepted our offer (our highest preapproved amount) on the first day that the house was on the market! The home inspection also uncovered Radon level of 4.6 and some other needed repairs. We commented after the inspection that we would incur repair expenses of everything except the septic repair. Any advise? Help!

We live in PA. We do have a contingency based upon home inspection that we can walk away. The owner was in a hurry wanted to close at the latest 5/14/07, but requested to close today (5/4/07). We have excellent credit and the loan was approved by the local bank within a few days. Since we were excluded on the info regarding the septic replacement ($13,000.00) and not told that we would need to pay1/2 until 5/3/07, we proceeded with the loan process ($300.00). Our buyers agent calls the sellers agent at our every request and then some. The seller agent is difficult to contact, doesn't answer his cell phone/you must leave messages.I plan to report him to his broker.

We live in PA. We do have a contingency based upon home inspection that we can walk away. The owner was in a hurry wanted to close at the latest 5/14/07, but requested to close today (5/4/07). We have excellent credit and the loan was approved by the local bank within a few days. Since we were excluded on the info regarding the septic replacement ($13,000.00) and not told that we would need to pay1/2 until 5/3/07, we proceeded with the loan process ($300.00). Our buyers agent calls the sellers agent at our every request and then some. The seller agent is difficult to contact, doesn't answer his cell phone/you must leave messages.I plan to report him to his broker.

Answer 1

Your option is to rescind and walk away, you'd be surprised how many sellers change their mind.

Do you truly believe you purchased under market?
If so, suck it up and buy the place.
If not.........walk away, see what the sellers do.

Things like this are always negotiated. Do you have an agent in your corner, is he/she working for their commission?

Where are you? The loan doesn't get paid for until the house closes, (in the U.S.) They may try to apply pressure, but, think about it, if someone dies, you lose your job.....the deal dies.
You are not stuck with loan processing costs. You will get stuck paying the appraisal, and any inspection fees

Never be afraid to walk away. My dad had a saying, "Marry in haste, repent in leisure". When you purchase a house, it's a financial marriage.

Good Luck

Edit: The worse you're on the hook for is the $300 loan processing, the inspection & the appraisal.

How motivated are they to sell? You'll find out. If it's a great deal including you paying part of the repair, close on it.
If not, be willing to walk away, $1000 is better than getting stuck with a bad deal.

Answer 2

Walk away - all the signs are this isn't the house for you.

The seller should be completely responsible for all the repairs on the septic system.
You're buying a home at your highest qualifed amount - leaving you no room for property tax increase, homeowner's increase. (both of these go up almost every year). Take a hint from all these homeowners in the news now unable to pay after just a few years.

Radon levels? The seller was comfortable living in a home with levels that high??

Communication between both parties seems insufficient. I suggest you look closely at really how much more money getting into this house will cost you...

Answer 3

In all honesty, I think you're missing the forest for the trees.

Yes, you can walk away (assuming that you made your offer contingent on the home inspection.) You can also suck it up and pay for the repairs... or virtually anything in between.

Still, as I said, I think you're missing the point. Septic systems are a dicey proposition. Sure, you can probably work out some arrangement to have the problem repaired. But how frequently will this become an issue? And what happens to your budget if you're paying someone to come and deal with it on a regular basis? If you can't afford HALF the cost now, will you be able to afford ALL of it if this becomes an issue again in the next year or four?

Answer 4

What does your contract say? If there is an inspection contingency it will state the remedy for this. In most cases you have to present the Seller with a written corrective proposal. If the Seller doesn't agree to do exactly what you asked for in that proposal then you have the right to terminate the Agreement of Sale and get your deposit back. Remember, everything has to be in writing and all parties have to agree to it. The Seller can't just decide on their own to split the repairs unless it's in writing and you signed it.

You should be working with a Buyer's Agent who should be taking care of this for you. If you are working with the listing agent then I suggest you call and speak with the agent's boss, the Broker. Explain the situation to them and they should be able to either get the Seller to pick up the tab for the rest of the Septic work or end the contract.

Good Luck!

Answer 5

You shouldn't be talking to the sellers agent, that is your agents job.

You can walk, or at least threaten to.

8K under is essentially asking price, you made a really good offer.

There are lots of houses out there.

Of course the sellers knew about the septic tank. Hard to miss a problem there. If they did not disclose that what else did they "not notice"?

I would walk. AND, do not offer your full pre-approval amount next time! Geesh! You will loose everything. That amount is basically for living with nothing, just working and paying the bank.

Answer 6

It sounds like you did not have your agent put a contingency of inspection in your contract. You never buy a home especially a used home without an inspection. You never know what is wrong with it. Your agent should have advised you of this. It doesn't matter if the seller would or wouldn't have accepted your offer if they knew about the repairs. But honestly they had to know there was a problem if they have been living in the house. I could understand it it were beams in the attic or something like that but a septic problem... You would know.

Answer 7

What it all comes down to is, what does your contract say about home inspection or any deficiencies that reveals? Contingencies are the name of the game for renegotiating or getting out of contracts when problems develop, without losing anything, or more than you already paid. My home inspector could not even get my boiler to light, but thought that the weather was too warm (in May). Actually there was an issue with a vent damper that would not have revealed anyway. When the boiler cycled on pressure when hot, the damper would close, but not reopen until it cooled, so the steam pressure was cranked way up to make it cycle less often. I knew nothing about steam heat or how to find anyone in the area knew who did. But I probably learned more about it on the internet and from books than most HVAC people who only deal with furnaces. I replaced the vent damper myself, set the steam pressure as low as it would go, and it has been comfortable and economical for 8 years. But a furnace that goes boom and blows sparks needs to have a professional look at it.

Answer 8

If you can't afford the $7,000 in added repair, you wouldn't have been able to afford the property even if the septic tank worked. You can walk away. Property is not a handshake deal. Everything must be in writing (escrow) so you can walk away now.