What happens if I back out of purchasing a home I put a offer in on?? Im in Virginia!?

I put a bid in on a home, and when we did the home inspection there were a tremendous amount of problems. I was notified that 5 days after he was notified of the problems they were all fixed! In the inspection 50% of the home was not visible due to all the furniture and boxes they had in each room. The homeowner is also a handy man and added a lot of upgrades himself. This does not sit right woth me because after purchasing this home I will be on a strict budget and have no money to put into the home if something goes wrong. I have made up my mind and want to back out and the closing is in 2 weeks . My realtor is telling me they can sue me. What can I do??

What you should have done was put a clause in the contract that said that the sale was contingiant on the owner making all the necessary repairs. Yes, you can be sued and forced to buy the home. I suggest that you talk to your realtor and tell him to speak to the brooker. Usually, if the owner knows you want to back out of the deal, he may lower the price of the home or make the necessary repairs. Also, go with the bank that is going to finance the loan. They may help you force the owner to make the repairs before they approve the loan.

I'm not an attorney, and I don't live in VA, so I would strongly suggest you find one. The attorney needs to review your contract and inform you of your legal rights. In some cases, someone can sue you for "specific performance" (your failure to exercise some part of your agreement); however, there seem to be a number of contingencies, which I would point out with your attorney (forget the Realtor at this point. Unless she/he practices law, the Realtor cannot interpret the contract, which was likely written by an attorney):

--50% of the home was not available for the inspection due to the fault of the seller

--were any of these upgrades actual additions that required obtaining of proper permits?

A court of law is highly unlikely to make you buy something as substantial as a home if you do not wish to buy it. Most contracts are written to protect sellers from buyers who simply have "buyer's remorse," not from buyers who don't want to buy a lemon of a house.

Consult an attorney. Good luck.

i dont think that they can sue you. most real estate deals has something called "earnest money" its a sum of money usually around $500-$1000 that is promised to the owner if you back out. just for i guess "wasting" thier time. if you didnt get the loan *wink* then there is NOTHING that they can do!!! i sold my house recently and i had a couple back out because they decided to seperate. if no papers are signed yet then they cant do anything!! have you signed any papers? i think this realtor is just wanting thier chunk of money and you may need to find a new one or just ask another realtor about it without telling the situation. just say... i am looking to buy a house... if i make a bid on a house and then change my mind before the closing dates what if any are the penalties? dont let them stiff you its horrible how people are so crooked to others now adays... good luck with this and let us know how it turns out.

Your realtor is correct. If the issues raised in the home inspection were properly remediated, you now have a fully binding contract to purchase.

You certainly have the right to ask for appropriate documentation that these problems WERE fixed. I would not rely on a simple document claiming that they were fixed. However, if appropriate documentation is provided (perhaps with a re-inspection at seller cost if he cannot provide receipts from qualified contractors), then you are basically obligated to continue with your purchase.

The clue to your reluctance and problem is your comment about it 'not sitting right with you'. This is an undocumented fear, and will not stand up in a court of law.

Do not take take lightly the comment that you can be sued. If he DOES elect to sue for breach of contract, the damages to you can be FAR over what you might expect.

If this person incurred ANY expenses due to your breach of contract, you can be held liable for those expenses, along with the seller's costs of pursuing litigation.

I recommend a re-inspection of the premises to satisfy yourself that the issues have been corrected. If they are professionally noted that the defects have been cured and you still refuse to close, get ready for a judgment against yourself.

First take a deep breath - Look at your contract.

Most contracts are written conditional on the outcome of several inspections. These inspections may include several items including inspection for wood-boring insects, excessive amount of radon gas, structural soundness, and the condition of the heating, wiring, and plumbing.

When the contract is written, it should specify who would be responsible if there is a problem with the results of any of these inspections. If well written, home inspections can create a safety valve for both the buyer and seller. If poorly written, the result can be heartbreak or law suits.

Your Realtor should be very familiar with the laws regarding home inspections. Many people have lost the home of their choice because the agent failed to comprehend this crucial report.

Not knowing your rights and obligations

Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands of dollars for repairs, inspections, and remedies for title defects.

You must be certain which repairs and closing costs are your responsibility. It is your Realtorâ€™s job to know the laws governing real estate transactions. They are involved in an on-going training program to keep up-to-date with these laws.

You deserve to have an agent who is not only knowledgeable about the transaction, but is also willing to educate you throughout the process so you will feel more comfortable.

Be sure your sales contract is worded so that any â€œearnest money depositâ€ must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale.

SO look at your contract - do you have any outs??? Also, request to have the home inspected AGAIN. And this time inform your agent that you want the WHOLE home inspected. It is your right..... Contact your legal consel in your state - the US Attorney office, do a web search for informaiton and phone numbers.

The other thing is - if you will be on such a strict budget ( how did you get qualified? FHA and Conforming Debit to income ratio's are 19/43 19 for home and 43 for home, taxes, homeowners insurance and any debit that is listed on your credit report - SubPrime DTI is higher.

Check out the : Welcome to the USDA Income and Property Eligibility Site See if you qualify there. Payments are lower and can be based on YOUR income.

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

This site is used to determine eligibility for certain USDA home loan programs. In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.
To learn more about a USDA home loan program, click on the Loan Program Basics link on the left side of this screen and select one of USDA's home loan programs.
To determine if a property is located in an eligible rural area, click on the Property Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate property eligibility screen for the Rural Development loan program you selected.
To determine income eligibility of an applicant/household, click on the Income Eligibility link on the left side of the screen and select a Rural Development program. When you select a Rural Development program, you will be directed to the appropriate income eligibility screen for the Rural Development loan program you selected.
To find out how to apply for a Rural Development Loan, click on the Contact Us link on the left side of the screen and then select a Rural Development Loan program.

Rural Housing Direct Loans are loans that are directly funded by the Government. These loans are available for low- and very low-income households to obtain homeownership. Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas. Mortgage payments are based on the household's adjusted income. These loans are commonly referred to as Section 502 Direct Loans.
1. Purpose: Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: Applicants for direct loans from HCFP must have very low or low incomes. Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI. Click here to review area income limits for this program. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant's income. However, payment subsidy is available to applicants to enhance repayment ability. Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. Elderly and disabled persons applying for the program may have incomes up to 80 percent of area median income (AMI).
Terms: Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Governmentâ€™s cost of money. However, that interest rate is modified by payment assistance subsidy.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.
Approval: Rural Development officials should make a decision within 30 days of the Rural Development office's receipt of the application.

Section 502 Guaranteed Loan Program:
1. Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility:
Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
Approved lenders under the Single Family Housing Guaranteed Loan program include:
Any State housing agency;
Lenders approved by:
HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities;
the U.S. Veterans Administration as a qualified mortgagee;
Fannie Mae for participation in family mortgage loans;
Freddie Mac for participation in family mortgage loans;
Any FCS (Farm Credit System) institution with direct lending authority;
Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs.
Terms: Loans are for 30 years. The promissory note interest rate is set by the lender.
There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.
Approval: Rural Development officials have the authority to approve most Section 502 loan guarantee requests.

Sounds like you're stuck. When the owner accepted your bid, it went to contract. Backing out now will be a breach of contract and you can be sued.

ask your lender for a denial letter. he may if you one, but no one want to not get paid, so you must let him/her know you still want to buy, but not that house...

depending on what was written in the offer paperwork, you may have no problem at all getting out of this. Did you specify that the sale was contingent upon a satisfactory home inspection? if you aren't sure, get the paperwork and read it. If you have that in writing, you don't have to go through with the sale and you don't owe anyone anything. If it is not in there, still not a problem. You can back out, but you will lose some of your earnest money - the realtor can take some of it for advertising etc. but usually not all of it. A good real estate lawyer and a quick consult on what would be a fair amount etc. is worth it, usually you can get a consult on something like this for not much out of pocket. I had this happen several years ago, put in an offer on a house, got the loan and everything, had the house inspected and found major insect damage. I wanted out because of the expense involved in correcting the damage. The realtor tried to keep my earnest money, and a fast phone call from a lawyer had them return almost the entire amount. So don't listen to the realtor, they are looking after their commission and not your best interests !!! hope this helps.

If you back out, with everythng on the inspection fixed, then they are right, they can sue you, and they would have a case.

Whether they would win would depend on how the purchase agreement was worded.

In many agreements, if there is a requiremnt for a home inspection there are one of two clauses. One would be "Subject to Buyers approval of home inspection." If that is the case, you have virtually unlimited right to cancel the transaction because you do not like the results, whether they were fixed or not.

Other times though, it will simply say that "Seller will pay up to $500 in repairs." or something similar, in which case you have no out.

So if it is the first, no problem, just write a letter saying in accordance with the terms of the purchase agreement you do not apporove of the inspection and you cancel the purchase, make sure it gets to the real estate agent.

If the second, you still have some play room, because if the inspector was not able to do a thorough inspection becaue of the items belonging to the owner there, insist on a complete inspection.

If the seller balks, just let them know that you know your rights, and that if the inspection was unable to be completely thorough because of the personal property of the owner, you must assume there are more problems that have not been discovered. They can sue, but if there is one thing in the house the inspector missed that would cause you not to buy the house, the seller and real estate agent will lose the lawsuit and hacve to pay you damages.

What I would do, is insist on a second inspection to be done when the house is cleared out of the owner's belongings. Offer to pay for it yourself. If it comes back clean, all well and good. You can be assured that you shouldn't have problems with the house. However, if problems comeback again, then you have a legal reason to cancel.

Good luck.

What does your Purchase contract say? Did you sign one? You CAN be sued if the purchase contract is valid and timetables are set (that's why people use them, so don't think that you can't be sued...because you absolutely can under certain conditions). You have to find a 'loop' in the contract if the inspection period is over, or, approach the SELLER...not the realtor...and see what the seller has to say. How much time for inspections does it give you? Who did the inspection when 50% was not visible...you? Or a licensed inspector? And if the home had a lot of problems...why buy it? If acquiring the home puts you on a strict budget, you're buying to much home to begin with. Lastly, you can back out if the house is unsafe....are the problems cosmetic or more serious? What do the laws in your state require? You have to check these things out...and your realtor is not going to tell you everything it seems in this case. The seller doesn't want to sue you if he can help it...it cost him money too! Have a professional inspection done before you do anything else. if you don't have the money, then stop now (if you can)...you shouldn't be buying a house. You can't afford it (you're buying a house with no reserve cash?), good deal or not. That's the real issue here.

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