Return of Ernest Money
 

Recently purchased home "From The Villages" and after inspection found MAJOR problems with inspection. After inspection period of 10 days I cancelled my contract on the 9th day of the 10 day cancellation period.

I was told by my Realtor I would get my refund and now going on 3 weeks and having my Realtor tell me over and over "It has to take a few days" to which I think 3 weeks should have been long enough.

Just wondering if anyone else has had this problem and what time limit (if any) is appropriate and who you suggest I contact in order to receive this.

Appreciate your help and look forward to your advice

First of all, The Villages does not have any Realtors, and, unless you paid for a buyer's agent, no one is representing you as an agent. Also, the inability to get insurance does not sound like an inspection defect that can be used to cancel the contract under the inspection clause. I would suggest that you have a real estate attorney read the contract and advise you if it allows you to cancel the contract.

What did the signed contract state??

They stated the inspection found "MAJOR PROBLEMS" including the roof. I would guess that major problems would qualify.

It depends on what is a major problem. Typically, the seller has the right to correct some defects under the inspection clause. The buyer doesn't always have the right to cancel the contract. One problem with the inspection clause is that the correctable defects are usually defined as a percentage of the sales price, which is highly subjective.

The age of the roof and the insurability of the house are things that the buyer could have easily determined before signing the sales contract. I doubt that the inspection clause can be used to cancel the contract for that reason.

OP, you should know that the earnest money is not being held by The Villages. It should have been deposited into an escrow account and controlled by an escrow company. You may want to call the escrow company and ask them if The Villages has authorized them to release the money to you.

10 days is not to be of concern. They are very busy with closings and they also have to have the seller sign a release so give them more time and ask your agent to keep in touch with you.

Age of the roof yes, but insurability?

How is a new buyer from outside the area supposed to anticipate a problem that is just now beginning to affect those who have lived here for decades?

It has never occurred to me to call insurance companies to inquire about a new policy for a home that I was only considering. I wonder how a company would react to that, would they send someone right out or would they suggest I move towards purchasing the home before asking them to spend time on it?

I agree. But even if you get insurance, it will only be for one year at best. After that, the company can require you to get a new roof anyway. If The Villages refuses to return the earnest money, the OP may want to buy the house and install a new roof. It is always risky to buy a house with an old roof.

Did you convey you intent to cancel the contract in writing with an email or text? If you just called the agent and told them you wanted to cancel then I would paper over the conversation with an email reminding them of your intent to cancel and the date on which you communicated that to them.

Its probably no problem and the 2 weeks is a just a delay due to them being busy. But in case it drags out its always good to have a paper trail.

Insurability
 

Insurance would be a huge concern. Mortgage companies require homes they finance to be insured at closing.

You bet you can get out of purchasing a home, new or pre-owned, if you find major issues. I’ve done both a few times.
When buying a new home, we had it inspected and many flaws were found, and we told the agent we are walking away. The realtor said the builder would spend the $20k to fix the issues and we said no. If the builder had these kind of issues that were in the open, what kind of issues could there be lurking in areas you can’t see?
Another new purchase, our contract said the house would be done/ready by the 1st of October. It wasn’t, just a few things weren’t done and we backed out.

Buying a used home, the realtor put in the contract that we could assume their low interest loan or get a new loan, this was back when interest rates were 12%, but the loan the owner had was 4%. When I checked with the owners bank on assuming their loan, the bank told me it wasn’t assumable. I cancelled the purchase but the owner and realtor tried to force me to get a new loan and it didn’t work. I even called the state realtor board and reported the tactics the realtor was using.

1 more thing, when you sell a home and put a clause in the contract that their is a grace period for the buyer to inspect the home or get financing, this gives the buyer a longer timeframe to back out. They can have a hang nail to cancel the purchase. This happened to us when we were in long a home.

"When buying a house, you typically lose your deposit (also called "earnest money") if you back out of the deal without a valid reason outlined in the contract, such as failing to meet contingencies like getting financing approval, passing inspection, or if you simply change your mind after signing the purchase agreement; in these situations, the seller can usually keep your deposit."

I got estimates on every home I considered. Not hard to do.

Are you receiving 100% back- in many cases The Villages “sales agency” keeps 50%

Seems to this post is not a matter of IF the OP will get a return of deposit but WHEN

That is legally correct, but some real estate companies are pretty flexible about returning earnest money because they don't want to develop a bad reputation. But there are other companies who don't care about their reputation. In some states, you actually need a court order to keep the earnest money. Also, some standard listing contracts allow half of any forfeited earnest money to go to the listing broker, not to the seller.

:what:

What did the OP’s post say before it was edited 2 hours after posting ? Seems like something is missing. Did an over 10 year old roof change to major problems?

In Florida, most realtors consider that the inspection clause allows a potential buyer to back FOR ANY REASON during the inspection period. I just went through it selling a house in St Pete Beach (before hurricane), and two buyers backed out with any inspection being done. One was surprised at insurance costs, the second was a scumbag that literally "just changed his mind after 7 days". While the standard Florida clause say different, the realtor agency would not support me in either case saying the clause did not apply since no inspection was done.

I strongly believe I could have fought in court, but of course that cost money and time. There is no doubt you should get your money back given legitimate inspection findings, but the most honorable thing to do is offer the seller an opportunity to repair issues (new roof etc). Insurance is not an excuse IMHO, roof issues if real are.

I would just add that the listing price was probably based on a house with an old roof. The buyer is not entitled to a new roof. An old roof is not an inspection defect.

Contact an attorney

Was this a new home? If not you didn’t from the villages. You may have purchased a resale using a villages sales agent. The Villages does not have Realtors.

Semantics aside, if you properly cancelled and you think it has taken too long for return of earnest money you should 1) check your contract for terms on this issue 2) go to the manager of The Villages Sales and give X business days to return (again your contract terms) if you don’t receive the funds file a complaint.

time to return is 1-5 business days in all cases I’ve been party to. Weeks is too long.

Make sure everything is in writing.

I understand that Villages agents are licensed real estate agents.
Seems many are confused about this cancellation issue. The most common real estate contract in Florida is called an AS-IS contract. Section 12 has an inspection period which gives the buyer a right to cancel within 15 days after the effective date. After cancelled, the seller must return the deposit. I have cancelled out of these contracts before a few times. You can cancel for any reason.

Look at section 12 in the contract.
https://peopleschoicerealty.com/wp-c...-version-1.pdf

The right to cancel gives the buyer the right to cancel for any reason.

The right to cancel gives the buyer to right to cancel for any reason. Too much confusion here.

You can cancel for any reason. You can cancel because you found another house down the street that you like better.

Any person who sells real estate for a commission must be licensed by the state.

The OP didn't say that it was an "as-is" contract, so, without confirming, that is a fairly large assumption. I have never purchased a house with an as-is contract.

Here you go - you start here, you want to bring this to the FREC.

What is the Florida Real Estate Commission (FREC)?

The Villages employs nearly 400 licensed real estate agents.

According to a sales agent that I discussed this with, The Properties of the Villages does not use "as-is" contracts, unless the house is in very bad condition. A typical Villages resale contract is NOT an as-is contract. You are correct that, if you use an as-is contract, the buyer can cancel the contract for any reason. But, if it is not an as-is contract, the buyer is locked in to the sale unless there is a specific clause in the contract that allows the buyer to cancel the sale.

That is correct. You can verify the real estate license of any Villages agent here.

MyFloridaLicense.com

Not correct unless it is an "as-is" sales contract which are not typically used for Villages resales.

Correct, but they are not "Realtors" because The Properties of the Villages is not a member of the NAR, The National Association of Realtors. Also, any person who sells real estate for a commission must have a state license or they are violating the law.

I don't understand. I thought you can backout of the contract pending the inspection. Meaning if the inspection finds something that you find unacceptable, you can backout. I thought my contract had this clause. If you didn't have a clause like this and couldn't backout why would you have the inspection? Wouldn't you pretty much be buying the home "as-is"? True the owner would have the option to correct any findings. In NY, you can backout up to the closing and get your deposit back.

Maybe in NY, but not in Florida. If the inspection reveals minor defects, the seller can correct the defects and the buyer must buy the house or risk losing their earnest money. Minor defects are sometimes defined as 3 percent of the sales price, which can be very subjective.

So, if the inspection finds a crack in the foundation or the home needs a new roof then can the buyer backout even if the seller agrees to fix the problems?

My thoughts are, if there is a severe crack in the slab or some severe drainage issue or something more significant is found, eventhough the seller agrees to fix the problem, I might not want to by the house.

Or another situation where the inspector finds evidence that the house had a fire or a flood and the damage was repaired. Again, I might not want to purchase that house or at least I would want to re-negioate the price.

So what protections does the buyer have?

The written contract.

My 2018 contract was not an As-Is contract. The threshold in y contract was 1.5%. Below that must be repaired and above that the seller had the option to cancel the contract.

If the damage repairs exceed 3 percent of the sales price, the buyer can cancel the sale. But, the contract doesn't clearly define who determines the cost of the repairs. To me, that makes the contract somewhat ambiguous.