Hi all. My wife and I entered into a sales contract with a seller of a home in Kansas. Within the set 10 day inspection period we had an inspector come and do a full home inspection. There were numerous unacceptable conditions with the property that we weren't comfortable with so we signed and faxed in our cancellation due to unacceptable conditions to the seller, again within the 10 day inspection period, and requested our $500 earnest deposit money back.

The seller is saying we broke our contract illegally and is not signing the agreement to cancel and give our money back. We have filed necessary paperwork with our local courthouse to take him to small claims court because we feel we have a solid case. His argument is that he allegedly agreed to fix all problems with the home after we faxed over the cancellation. My problem with that is we didn't fax him a request to negotiate and fix the problems with the house, we just sent a cancellation due to unacceptable conditions. Do you agree with me? Will I have a problem in small claims court??

Our contract specifically states that we can cancel the contract if we find any unacceptable conditions that we as buyers deem unacceptable with the exception of the above listed items. There is a space for exceptions and nothing is written in by the seller or us.

Help! :confused:

Does your contract say anything about the seller having the right to repair those conditions? If the contract says that the buyer can cancel if the seller refuses to repair the conditions then you had to give the seller a chance to fix it first.

If the contract doesn't say anything about the seller having the right to repair then based on what you've told us you should be OK in court.

The cancellation we sent them has 3 different options. One is we agree to accept the property as is after inspection and everything is OK. The second is giving the seller the option to fix the list of attached things on the inspection report and then we re-negotiate. The third is just a straight up cancellation due to unacceptable conditions and that is the one we checked off, initialed by and signed the bottom of.

Was this cancellation form something that was part of the contract already?

It is a separate form. The section of the contract on inspections does not say that we are obligated to give the seller a chance to make necessary improvements to the property.

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Originally Posted by fastlane8

It is a separate form. The section of the contract on inspections does not say that we are obligated to give the seller a chance to make necessary improvements to the property.

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From what you've quoted from the contracts you should be fine.

I am curious... where did these forms come from? Are there realtors involved in this transaction and/or a title company?

Karla in TX

Yes we are going through a real estate company. They are their contract agreements and forms.

If the contract does not require that you give the seller a chance to fix the items then you should be OK.

When you go to court make sure you bring every piece of paper with you--the contract, a copy of the form you sent to them, the inspection report and anything else you may have pertaining to the property.

Sounds good. My realtor and her broker told me I was fine, but I just wanted to feel out to make sure others thought the same. Thank you!!

OK. Do you have a dedicated buyer's agent, or are you just using the agent who listed the property? Is it actually the seller who is personally refusing to give you your money back, or the seller's agent is saying no?

If they are the realtor's forms and they read as you stated you should be fine in court.

So is your earnest money being held in escrow by a title company? Who did you make the check out to? If there's a title company involved you may try contacting them to see if they'll encourage the seller's agent to release the funds. There should also be a local board of realtors of some sort you can contact.

Did the seller fill out a condition/disclosure form? It should have been part of your standard paperwork. Were some of the defects things that they should have noted on the form, but didn't? If so, I'd also sue for the cost of the inspection and additional for the time this has all taken you. If they knowingly omitted info.

We have a dedicated agent separate from the listing agent. The sellers agent things the seller is ridiculous and it is solely the seller being stubborn. We made the check payable to a title company. They have already deposited it in an escrow account as the check cleared my bank account a while back. I'll do some checking with the board of realtors. If it isn't the agent dragging his feet, can they really do anything though?

There was a sellers disclosure but there were not mentions of anything we found in the inspection.

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Originally Posted by fastlane8

If it isn't the agent dragging his feet, can they really do anything though??

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Well, it would seem to me at this point the seller's agent needs to "explain" it to their seller and tell them that, by law, this earnest money must be returned. I guess the agent can't literally force the seller to sign the release so the title company can issue you a refund, but I would also think that by law they have an obligation to see that it's handled properly. I'd at least contact the board and see what they say.

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Originally Posted by fastlane8

There was a sellers disclosure but there were not mentions of anything we found in the inspection.

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Right, so I guess that's what I'm trying to point out. SHOULD some of the things have been disclosed? Are all of the things that the inspector turned up items that the sellers could have had no knowledge of? Or are some of them things that were conveniently left off the disclosure? You might also bring up the fact that NOW that the seller is aware of these items the disclosure form must be changedto disclose these defects that they've been made aware of.

Good luck!
Karla in TX

Have you contacted the Title company? If they are holding this money because the seller has refused to release it, you may be able to convince them to do so.
I agree with Lisa and Karen that he has no case. But as clear cut as this seems to be, the Title company may not need the seller's permission to release the escrow.

Contact his agent, and the title company, explain to his agent that you will also be reporting this to the state real esatate board.

And if you sue, sue him and the title company, since it is they that have your money