Thread: Additional disclosure after signing of the contract and before closing

Hi
Your contract should state that the owner keep the property in good repair with all mechanics, landscaping etc being the same as of the effective date (day last party signed contract).
That being said, this sounds like a "latent defect". Which the selling agent is required by law to disclose to a potential buyer and it should have been reflected on the "sellers disclosure". If it is disclosed there with the statement that it has been fixed, then the owner will need to make the necessary repairs prior to closing or give you a credit to do so. If it is not on the disclosure your issue should be addressed to the agents broker as they have failed to represent the property in consistent manner with state law, which is an issue for the brokerage both monetarily and reputation wise, not including what the state may do/impose for failure to disclose.
The important thing is to now document every communication for this issue in writing, and move forward with the scheduled closing. Be sure to meet all your obligation deadlines and appear at the closing table ready, willing and able to close on the contracted date, even if the repair is not done. If you are mortgaging the property the bank will probably not fund it until repairs or credit are agreed to. If its a cash deal work it out at the closing table, the seller will be anxious for their money.
Good Luck
JT

Once the seller fixed the roof they are under no obligation to disclose that the roof USED to leak. The disclosure is only about disclosing known problems not what used to be a problem and was fixed.

Your home inspection did not find a problem with the roof, so apparently there was nothing wrong with the roof until recently. If you try to get the agent or the seller in trouble you won't have any ground to stand on because you had a home inspection that showed no problem with the roof. If anyone is to blame it would be the home inspector. Did they miss the problem or was there no problem when they inspected?

The only choice you have now is to decide if you want to go through with the sale. When you signed the contract were you aware you were buying a used roof or did you think the roof was new?

If a little roof repair is more than you can handle now then you probably are not ready to take on being a landlord.

To answer your main question, you should get your earnest money back because the house is not in the same condition as when you signed but you lose the appraisal and inspection fee and any other money you spent.

The seller MUST in all states answer the sellers disclosure truthfully. If there was a probably and it was fixed, than this is their time to come "clean" if they answered "no to any present or past known leaks or water intrusion to the structure" then they are hiding the fact. It is against the law, period. They told you it existed at one time, look at their disclosure to see what it says. Again, it sounds like a latent defect see def below:
In the law of the sale of property (both real estate and personal property or chattels) a latent defect is a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale.
The general law of the sale of property is caveat emptor (let the buyer beware) and buyers are under a general duty to inspect their purchase before taking possession. However, it is understood at law that inspection is not often sufficient to detect certain deficiencies in the product that can only be discovered through destructive testing or other means that a seller could not reasonably be expected to allow under normal conditions. For example, wood beams and interior brickwork often cannot be fully assessed without destructive testing, and it would be unreasonable for the seller to allow the buyer to take apart a car's engine.
As such, the law expects that buyers will protect themselves in the sales contract against defects they cannot possibly be expected to assess prior to purchase. As such, the term "latent defect" is often used as part of the guarantee clauses in a sales contract so that the buyer can recover damages from the seller if defects turn up in the property after the sale. For example, the seller may be required to pay for repairs of any such damage.
Since the seller had it repaired, have him get the contractor back to fix it correctly this time, or follow my advice in previous post
Good Luck
JT

Originally Posted by Greg

The only choice you have now is to decide if you want to go through with the sale. When you signed the contract were you aware you were buying a used roof or did you think the roof was new?

If a little roof repair is more than you can handle now then you probably are not ready to take on being a landlord.

The porch roof was used with no timeline on when it was last replaced. That being said, lots of used roofs do not leak. We didn't think, oh, well the roof is used, we'll definitely have some water problems.

I don't see how being a landlord and haggling over the repair of a porch roof have much if anything in common, unless we get an elderly tenant that takes frequent leaks.

I just told my real-estate agent to tell the seller that the roof will have to be fixed, or we withdraw from the contract.
As far as the arguments in our favor (according to my agent) the FHA appraisal came back at 190,000, so three-months has to transpire before another appraisal can be made.
However, she stated that he is under no obligation to disclose the leak in any future disclosure, even if he does not fix it. My reaction is to disagree with that, but she states that the disclosure is only "a type of FYI", and he is not legally bound.

Originally Posted by JT Steele

The seller MUST in all states answer the sellers disclosure truthfully. If there was a probably and it was fixed, than this is their time to come "clean" if they answered "no to any present or past known leaks or water intrusion to the structure" then they are hiding the fact. It is against the law, period.
JT

This is not the case in NC. A seller doesn't even have to disclose problems that currently exist. Real estate is local. The rest of your argument is just copied from wikipedia and is too broad an answer to apply everywhere.

Originally Posted by tdk77

I just told my real-estate agent to tell the seller that the roof will have to be fixed, or we withdraw from the contract.
As far as the arguments in our favor (according to my agent) the FHA appraisal came back at 190,000, so three-months has to transpire before another appraisal can be made.
However, she stated that he is under no obligation to disclose the leak in any future disclosure, even if he does not fix it. My reaction is to disagree with that, but she states that the disclosure is only "a type of FYI", and he is not legally bound.

Perfect, the seller fixes the leak or you walk away.

And what your agent said about the seller disclosing it in the future is probably true if your state is like NC. Here the seller can claim 'no representation' and legally not disclose anything.

How is it the inspector missed this? Did the roof get damaged after the home inspection? Improperly installed or damaged shingles should be obvious to a home inspector. If it is not the shingles then it could be flashing, or the lack of, in which case the problem will be harder to fix. I am bringing this up because the typical fix for missing flashing is caulk. Caulk will only be a temporary fix.

If the seller fixes the problem I suggest you investigate further to find out how it got fixed and if the fix fixed the real problem or just covered it up. I would recommend you hire a professional roofer to look at the roof for you and to monitor the repairs.

I am not saying the seller is trying to cheat you because they came to you and told you about the leak at a time when they could have covered it up and let you buy it unknowingly. It is just that sellers always look for the cheapest fix available which is why I recommend to my buyer clients that they just take money and do the repairs themselves.

If the appraisal came in low why are you buying it without renegotiating the price?

Laws regarding disclosure differ in every state. Therefore, the forms to be filled up vary depending on the location.

Unfortunately, I don't know the disclosure laws in MO., so we have to rely on the agent. We pressed her for more specifics, but were unable to get anything concrete. Have to look more into it myself

Not sure how the inspector missed it... he has a pretty good rep too. It's dark colored bead board, and once we looked at it pretty closely were able to discern some leaking and old stains, but no serious sagging. Not sure what recourse I would have with him... perhaps a free inspection if we go with another 2-fam?

The orig. sale price was 200, the appraisal came in at 190, and our loan is for 189. Our argument, is that he would be unable to sell it for much over 189 for at least 3 additional months, unless it is a non-FHA buyer. We are invested in the process, but I am sure the seller is now weighing the difficulties and time in finding a new buyer, or just fixing the thing and moving on. He initially stated that it would only be a $250 fix, which is why we were so perplexed that he didn't volunteer fixing it, instead adamantly refusing. Because of his attitude, we began to think there might be a bigger job than 250 lurking on this roof.

Highest quote was 1235, lowest was about 600.

In addition to the roof, he just recently failed a gas inspection, so now he has to tally that to his expenses as well.

Maybe you can get the home inspector to go back and inspect the fix after the seller says it is done to be sure the roof was fixed properly and do it for no charge since they initially missed it.

If I were you I would submit the highest estimate to the seller and ask for the amount to be subtracted from the purchase price. Then settle for an amount somewhere in the middle and do the repair yourself. This way you know it is fixed once and for all. The seller is going to do the cheap fix which might stop the leak temporarily but not fix the underlying problem. Reoccurring leaks can be hard to pinpoint sometimes as water will travel through a house before it shows itself.