Market Wise Q&A: Contract Cancellation Needs Guidance from an Expert
Q: We are selling our townhouse and the buyer's pest inspector found damage to the exterior of our home to the tune of $4,300. Evidently, our homeowners' association does not cover repairs for drywood termites and/or dry rot. To make matters worse, our agent informed us that we have to pay for the pest abatement and the repairs because it's "in the contract." We feel our agent should have made us more aware of these items; she disagrees. After these surprises, we'd prefer to go in a different direction and cancel the contract. Everyone tells us to just cancel the sale and move on. What are our options?
A: First, it's amazing how many sellers and their representatives are surprised to find out their homeowners' association does not take care of certain exterior repairs to the building or their decorative balconies. Second, it never ceases to amaze me how many agents are speechless when they discover that the contract specified section 1 pest repairs. One reason they are silent is that they are contemplating how to inform their sellers of this "new" development. You can bet those sellers were silent, too - up until they threatened to cancel the sale and/or refused to provide the repairs in question. Unfortunately, they often learn that the buyers have already fulfilled their part of the transaction at every step - severely weakening the chances of a unilateral seller's cancellation.
People don't realize it's not just a sale, it's a contract. And the only person qualified to help a seller cancel a contract properly is a real estate attorney. He or she will provide the advisability, and detail the expenses that will be incurred by rescinding the contract based on the seller's set of facts.Consumers have a duty to protect themselves, especially when signing a contract. Yet most sellers, buyers and their reps expend more attention on the purchase of a car than they do the marketing and sale of their home.
by Pat Kapowich SiliconValleyBroker.com, owns Kapowich Real Estate in Sunnyvale. E-mail questions to him at firstname.lastname@example.org
Excerpted from the San Jose Mercury News, SJMN
Market Wise Column Saturday, October 4th