I have been working for a while with a young couple that is buying their first home. After several offers were not accepted, they finally went to contract on an interesting property. We recently got back the home inspection reports and there are numerous problems and some code violations. One problem in particular is that the home is serviced by a cesspool rather than a septic system, which is a code violation here in CT.
That repair will take some time to remedy and in light of the projected time frame the lender issued a declination notice based on an unacceptable property. There are no credit issues at this point for the couple.
They were about to terminate the contract based upon their inability to get an unconditional mortgage commitment within the time allowed under the contract.
I don't like to get involved in contract issues as I believe that contract issues need to be addressed either by their attorney or their broker. However, this couple asked me some questions about terminating the contract. Their broker was about to terminate the contract and I did tell the broker that I thought terminating the contract was a mistake as there would be no assurance that the seller would sell the property to them after repairs and improvements for the same price, or that the seller would not sell the property out from under their feet. They really want this property and are willing to deal with the work that needs to be done, and the property is, if you look past the repairs and improvements that need to be done, somewhat unique.
I told the broker that I would extend the mortgage and closing dates under the contract, spell out the repairs to be completed by seller in an addendum and be sure to provide for a right of re-inspection after the repairs are completed (a lender requirement). I did not feel that terminating the contract was the way to go. I also explained to the broker that it was her call, and that I was only responding to questions posed to me by the couple. What is your impression of the situation?
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