Under Contract for REO Property With Structural Problems

[Buna]

Buying my first home and just found out the house has some structural problem and I am 10 days past my due diligence period. According to my agent, the listing agent knew this information and failed to disclose it. The house was under a contract before me but the person withdrew due to this same problem but I am not sure if buyer provided a written inspection report.
The listing agent left a Voice message (we have it saved) saying that he disclosed the defect verbally which he never has. I thought he was supposed to disclose it in writing? I am frustrated and stressed. He threatened my agent and called him names but my agent seems to be soft spoken when he replies to this snake. I am dismayed and disgusted by the shrewd nature of unethical agents I tend to have noticed in this business. The listing agent dragged to reply to our request for repair pushing us to pass the inspection period. I was the one who procrastinated to pull out of the contract because I hoped the problem was fixable. According to the inspector, the house might even be in violation of a building code because it is hazardous and the second floor may slide in if not fixed in due time. As a matter of fact, the house may not even qualify for loan. I have a FIN and Appraisal Contingency. Will I lose my EM ? I will go to whatever legal extent it needs to expose people like this. He cost me my first time home buyer credit $$, inspection and the stress. Please help.

[Mr. Knowitall]

REO properties are typically sold 'as is'. Do you have a contingency in your contract that would allow you to avoid the sale based upon the problem you have detected?

[Buna]

I don't think I have a specific contingency that mentiones the structural probelm I have. I however read that REO properties or AS is doesn't mean seller should withhold known material defects. The listing agent admited his knowledge of the problem and claims to have said it verbally. I thought the contract will be null if he withheld known defects?

[jk]

I thought the contract will be null if he withheld known defects?

not necessarily. It might be voidable but it does not void the contract by itself.

[Buna]

I am not sure what the difference is between the two- if voidable, what does it mean? could be voided with enough evidence? or upon two parties agreeing?


Thanks,

[jk]

if a contract is void, that means it is no longer a valid contract. If it is voidable, that means it can be rendered invalid but it is not yet so. In your situation, the contract would not be void simply because of the lack of disclosure. It might be voidable but that would depend on all of the other facts involved..

and if there is disagreement between the parties of it being voidable, it usually ends up in the courts as the courts are the only entity that can actually rule a contract void.

[Mr. Knowitall]

If you agree to purchase a property "as is" and waive any inspections, you are accepting considerable risk. Given that the real estate agent claims he disclosed the condition to you, it becomes a swearing contest in relation to your claim that he did not.

I can't look up the laws for your state, as you didn't follow the instruction to tell us where this is occurring.

[Buna]

oh sorry , I am from Georgia.

[SChinFChin]

I've bought REO's, live in one right now, and can tell you rarely would a bank hire people to do repairs. The idea is for the buyer to buy "as is" and offer a price low enough to cover the repairs. So if in your estimation, the repair costs $10,000, then knock $20,000 off your offer.

Dickering over repairs is when you buy from a homeowner. I know a lot of people shy away from REO's because of the "as is" issue. If you want a place repaired before buying it, don't buy REO's.

The best analogy is if you have an old sick person with Alzheimers sent to a nursing home, and he has no choice but to sell a vehicle "as is". You are not going to ask this person to slip out of the nursing home, to go around to repair shops to price repairs to get the car into tip top shape for you. He can't. You just offer a price to cover the repairs yourself, or buy another car.

The heard of a few cases where there were enough problems, that the REO seller is nickeled and dimed to death, so they do a "top to bottom" rehab, and ask for FULL PRICE.

[Buna]

Many of you comment on how REO works and I pretty much got the point ! there is NO REPAIR and no disclosure. But many miss it that NO disclosure doesn't pardon you from disclosing known defect (is what I read on the Realestate law) I know I made a bad decsion. However, my question was explaining the nature of the contract which started in deception where the previous buyer got out of the same issue and i happen to find out later in the game. My question to asking your help here was on how to present the case or how to get my EM with out having to go to a larger magnitude of law suit.

I may be thinking ahead here and the seller might have agreed to return the money but Agent said no communication as of yet.