Buyer’s inspection contingency beats seller’s ‘as-is’ clause
Q. I am a longtime reader of your column, and I am hoping you can help me with my situation.
I made an offer on a house that was listed “as is,” and — like you always recommend — I made the offer contingent on my approval of a report by a home inspector of my choosing.
The seller accepted, but my inspector then found major problems in the home that would cost about $20,000 to fix.
The seller refuses to pay for the repairs and, even worse, he maintains that the fact that his home was listed “as is” entitles him to keep my $9,000 deposit if I don’t go through with the sale. What can I do?
A. First and foremost, don’t panic.
The inspection contingency that you wisely included in your offer legally allows you to cancel the sale and get your deposit back. The fact that the seller has been offering the property “as is” doesn’t matter.
Many sellers today think that offering their home “as is” gives them an unusual amount of power over prospective buyers. It doesn’t. Offering a home on an “as-is” basis simply implies that the seller won’t pay for any needed repairs. It does not free the seller from the obligation to disclose a home’s defects, and it certainly does not allow the seller to keep the deposit if the offer is contingent on the buyer obtaining a satisfactory inspection report.
Provide the seller with a copy of the inspection report, and tell him that you will cancel the deal and demand your deposit back if he won’t pay for the repairs or lower the sales price.
If the seller again refuses to return your deposit, notify the closing attorney or escrow officer that the house failed its inspection and that you are exercising your right to terminate the sale and get your deposit back.
If the seller still gives you a hard time, you should remind him that he is now legally obligated to disclose all of the defects your inspector uncovered to any other would-be buyers.
Faced with that prospect, the seller would be wise to either renegotiate the deal with you or return the deposit without causing any more trouble.
Q. I have been in the U.S. Navy for several years and would like to buy a house near my base for my fiancee and myself.
Is it possible for an enlisted person to get a VA mortgage, or is the program only available to people who have officially left the military?
A. You are eligible for a no-money-down mortgage through the Veteran’s Administration right now.
The VA is happy to back loans for active military personnel, as well as for sailors and soldiers who have retired from the service.
The VA will need one of two documents to establish your eligibility for a loan:
You can provide either Form DD 13 “Statement of Service,” or a letter ( on military letterhead) from your commanding or personnel officer that states your name, service serial number, the amount of time you have been on active duty and other basic information.
Contact your regional office of the U.S. Department of Veterans Affairs for more information, or visit the agency’s website, www.va.gov.
I’d like to extend a word of thanks to you for contributing several years of your life to help keep our military strong and our nation free.
Q. I was interested in your recent comments about living trusts, especially the fact that trusts — unlike wills — do not have to go through the costly probate process. However, don’t some states offer faster and less-expensive “simplified probate” for certain types of wills?
A. Every state offers a form of simplified probate for wills, but the sad truth is that very few estates qualify.
In many areas, simplified probate is available only to estates valued at $5,000 or less, essentially limiting the programs to those who have little to give away or inherit. As your letter mentions, people who create a simple and inexpensive living trust can avoid probate altogether because living trusts — unlike nearly all wills — allow for assets that were placed in the trust to pass automatically to heirs without interference from probate judges and lawyers.
Offering a home on an ‘as-is’ basis does not free the seller from the obligation to disclose a home’s defects, and it certainly does not allow the seller to keep the deposit if an offer is contingent on a satisfactory inspection report.”