Contracts, Contractors, and Good Faith

By
Real Estate Agent with Colonial Real Estate Group - The Good House People, LLC

 

 

Contracts matter. It seems like such a needless statement of the starkly obvious. But contracts are a legal agreement that basically states, in writing, how parties are going to behave and operate during the course of a transaction. 

I just had some buyers back out of a contract. They did the right thing. But it did not need to come to this, and it was all a matter of contract and performance. 

The property was a government relocation listing. When my clients submitted their offer, we were informed that the addendum was based on the government’s requirement to do their own home inspection, disclose everything they discovered about the property in writing, and what was going to be fixed. The addendum was 112 pages long. The total contract was 126 pages! 

My clients were not intimidated. As first time buyers, they actually liked the intense disclosure, and were happy to do a home inspection after the initial round of repairs done by a contractor hired by the listing agent. All of this was spelled out in the contract. 

One of the repairs that the listing side agreed to was to repair some wood pickets and columns that had wood rot due to long and untreated exposure to water. The work order specifically stated that the rotted wood would be replaced and painted.

 When my clients and home inspector walked up to the property after these repairs were “completed”, we noticed a big gob of putty where one of the major patches of rotted wood was. No sanding, no painting – just a mound of goo sitting on the column. The base of this column was actually circled in red on the home inspection that we received from the listing agent. It stated plainly that this wood would be replaced, prepped and painted. Instead, they simply painted the rotted wood. The home inspector took out a screwdriver and checked the wood. The screwdriver went about 3 inches into the wood base, and the rotted wood crumbled and fell onto the porch. 

From this moment on, my clients had their white gloves on, and every repair was going to get scrutinized. We found several instances of items that were similarly “repaired”. 

When I reported back to the listing agent, she informed me that her contractors guaranteed their work, and that they would come back and fix those items that needed additional attention. My clients’ view was that “we have seen how they fix things, and we’re not interested in the same contractors doing any more work on the property”. 

My clients were only interested in pursuing the property if they could hire their own contractors, and have the repairs paid for by the sellers. The listing agent explained that she would accept a bid from my clients’ contractors, but they she would need another bid from one of her “approved” contractors as well. My buyers were not at all interested in this scenario.

The bottom line is that my clients were downright excited about the home. As first time buyers, they were not at all worried about the work that needed to be done. Had the work been performed the way the contract stipulated, we would be setting up a closing date with the title attorney. Had somebody from the listing side exercised some adult supervision over their own contractors, my buyers would not have lost complete faith that they were capable of repairing the property to the extent that they said they would in the contract. My clients were baffled as to why somebody would go to such lengths to disclose problems, provide in writing how they were going to fix those problems, and then not fix those problems as promised. 

Contracts matter!

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