Richmond VA Real Estate Contract - The HVAC Broke Right Before Settlement
Richmond VA Real Estate Contract - The HVAC Broke Right Before Settlement - I recently had a buyer go under contract on a great West End townhouse for sale in Henrico
. Everything was going smoothly from contract all the way through to agreeing on the home inspection repairs. The appraisal was done, the termite inspection was clean, and we were just 5 days from closing. Then, IT happened.
The listing agent sent me an email late one evening informing me that the HVAC unit died and, according to 2 HVAC companies, it must be replaced. The agent went on to tell me the seller didn't have any more funds to make repairs. Instead, the seller decided he would not replace the windows, that all parties agreed upon, and would offer a credit for the buyer to put towards a new HVAC unit. Umm, that's not how this works!
A Deal is a Deal, You Can't Unilaterally Take Back Something You Agreed Upon
What's the problem here? Well, both the seller and the buyer agreed upon specific repairs, including windows being replaced. The home inspection repair addendum had been signed, sealed, and delivered. The seller couldn't unilaterally take away the windows being replaced to deal with a separate problem. The fact is, this was not a time where the seller could renegotiate the home inspection addendum.
Know Your Richmond VA Real Estate Contract
Too many buyers and sellers enter into sales agreements without even reading what the contract states. This is very foolish as a real estate contract is a legally binding agreement. It is important you select a Richmond VA Realtor
who not only understands the contract, but one who will also make sure YOU know what you are getting yourself into.
In this case, I turned to the Equipment Condition and Inspection clause in our contract which, in a nutshell, states the seller warrants all appliances, heating and cooling, and plumbing and electrical will be in working order at time of settlement. Clearly, in this scenario, the HVAC was no longer in working order as it had been when my buyer had gone under contract and during the home inspection period. The windows were not a bargaining chip and the HVAC had to be fixed, or in this case, replaced.
What if the seller really doesn't have any more funds to fix the HVAC? Well, if I were the listing agent I would refer to the Risk of Loss paragraph and claim the replacement of the HVAC unit would be a substantial loss for my client. While this may be an argument, it is my opinion it would get held up in arbitration as someone would have to determine what a substantial loss is for the seller.
So, what happened? The listing agent and myself looked for a win-win and we found it. The seller pre-paid a HVAC company of the buyers choice while the buyer made up the difference. The seller had SOME money to put towards the repair, just not the entire amount. My buyer had anticipated a replacement for the near future so it was to their benefit to have the seller pay some of the cost. And, the windows were replaced as originally agreed upon.
Minimize Your Risk While Your House is for Sale
Could this have been prevented? Seeing the HVAC was from 1979, it is doubtful. It was basically a ticking time bomb. However, if the listing agent had encouraged his seller to purchase a Sellers Home Warranty
policy, this item would have been covered. (Note: not all home warranty companies are created equal so make sure the one you select does, indeed, offer this level of protection) For under $600 the seller would have been protected, saving thousands of dollars. What is it "they" say: an ounce of prevention...
Richmond VA Real Estate Questions
Do you have questions regarding the Richmond VA real estate
market? Contact your Richmond VA real estate agent
, Shannon Milligan at the RVA Home Team
with Keller Williams Realty, today!