Real Estate Law
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Hello. I'm, sorry to hear that you are having such problems buying a home. If the seller cannot deliver the home that you contracted to purchase, then they have breached the contract. You have the right to rescind any agreement thus far and receive a refund of your down payment and payments made up until now. You haven't breached the contract, so you have no risk of loss. I want to point out that these things do not happen automatically and you might need an attorney to pursue your legal remedies.
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We were in agreement for 15K reduction in purchase price and buyer takes care of the legalization process, however the seller attorney wants to include in the contract that the garage is illegal which will prevent the buyer from qualifing for an FHA loan. Can we sue the seller for breach of contract for not being able to deliver the house with 2 car garage as stated in contract? How is that the the buyer can loose their downpayment in a breach of contract but the seller doesnt have anything to loose? Seems so one sided.
You could have cancelled, but you agreed to take the home "as is" for a price reduction. If you didn't specify that the home still had to qualify for HUD financing, you didn't leave yourself an "out". If that reduction agreement is in writing, you're stuck. with it. A good lawyer prior to signing docs in real estate is always a good idea.
I do have a lawyer I just want a second opinion. I did not sign any agreement or changes to the contract. The contact is still original. All agreement was verbal. However, the seller's attorney doesn't want to reduce the price of the home by 15K via a Rider to the contract, he want to change the entire contract to include that the garage is illegal and will be taken care by buyer for legalization. But this prevents me from getting the FHA loan.
Then in that case, call the deal off, because you if you don't get a mortgage loan and you don't have a financing contingency, you stand the risk of losing your earnest money deposit. There must be other homes for sale on Long Island that have legal garages.
The reason that the home is in your price range is that it has a huge defect that's going to cost a lot of money to fix. The contract doesn't say that the seller warrants the condition against all defects and he agrees he will fix the home up for you. So if the roof turns out to be bad, the plumbing leaky and the electric service is defective, the seller doesn't have to fix it for you. He can say buy it the way it is, or here's your earnest money back. That's the way real estate deals work. You did the right thing by refusing to buy the home and waiving the garage problem.