Disclosure issues can gnaw away at the sale process

Q: The home we bought was under contract once before. That previous sale fell apart on a Monday, and we bought it on Friday. We issued our landlord a 30day notice after we removed our property inspection contingency. The problem is that our home purchase is screeching to a halt. We bought this property thinking it was termite-free. The day before last, the buyer’s agent on the failed first sale called our agent to tell her that there are termites in that house. It would seem the prior sale fell apart over a dispute concerning termite inspectors. The seller had his termite report stating no sign of termites. Owing to that fact, our agent agreed with us that a termite report was redundant, so we only hired a wholehouse inspector. Willful ignorance on our part because the previous buyer engaged a termite inspector who found termites. The prior pending sale devolved into a rescission because the home seller underhandedly disagreed with that buyer’s termite inspector. The level of acrimony is increasing. Instead of addressing the termite issue, the seller wants to sue the first buyer’s agent for disparaging his property to our agent. How do we get this termite issue resolved without any more delays?

A: The seller should be thankful the information was shared before the closing of escrow, as opposed to after. Disgruntled homebuyers routinely sue Bay Area home sellers for hidden defects as well as hiding defects. Conversely, prudent home sellers who make full disclosures and repairs before or during a sale rarely end up hiring attorneys. This seller needs to understand that licensees can and will share information about property defects. Insist that you bring in licensed termite inspector No. 3 ASAP. If your inspector finds termites, ask that the seller or seller’s termite inspection firm eradicate them at their cost. Otherwise, you’ll likely need to meet with a real estate attorney to discuss rescission No. 2.