If the buyer lied about seeing property before escrow, breaks toilet and cancels because of the view, can the seller keep some escrow deposit?

Buyers made an offer and we asked if they've seen the property. We want to make sure we move during summer to not affect our children's education and didn't want buyers that would waste our time. They told our real estate agent that they indeed see it in person. After entering escrow, on the day of home inspection, 11 days after making an offer, they admitted that was really the first time seeing the property. They ended up cancelling, telling our agent they didn't realize the hill behind our house blocked some of the view. This really made us mad. They would have known that if they had seen the property like they said. Not only that, the home inspector they hired broke our toilet. He seemed careless and we wonder if other things like broken roof tiles were his fault. (My husband just happened to overhear him telll the buyers about the tiles) We don't know what else is wrong with the house that could possibly be caused by the inspector. They just sent us a cancellation form requesting ALL of the escrow deposit back.
1. Don't they have to pay for our toilet? Section 12Dii " buyer shall repair all damage arising from Buyer investigation.
2. Don't they have to give us a copy of the report? Section 12Bii "buyer shall give seller, at no cost, complete copies of all such investigation reports..."
3. Can we keep more than the repair costs of the toilet since their reason for cancelling had nothing to do with the home inspection? I read a seller can be compensated for wasted time.
(0) | asked by: Irene g | share | 4 months ago | Report
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answer by Terry Bell    |   Visit My Website   |   Contact Me
Homes fall out of escrow for all kinds of reasons, and if the buyer is within the time limits of the contract, they did not need to give you a reason. You gave them permission to inspect the house, and I think it would be hard to prove as to whether the toilet broke because of something the inspector did vs. whether there was a problem already with the toilet. Arguing with them will hold up the sale of your home further. I would think you would want to move on to working with a new buyer asap.
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answer by Ryan Huggins    |   Visit My Website   |   Contact Me
Sorry this happened. I don't want to step on your agent's toes since you are represented. There are some trade-offs to pursuing the buyer versus saying "oh well, on to the next" as Kris pointed out. My advice would be to sit down with your agent or to contact a real estate attorney for their views.
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answer by Rich Reed    |   Visit My Website   |   Contact Me
Hi, Irene. Your agent, your broker, and your attorney are your best sources of advice about your specific transaction. Unfortunately, buyers as you describe are not uncommon. There are some ways that sellers can mitigate the effect of such buyers, such as shorter inspection periods or having some or all inspections completed prior to acceptance. 1) Yes, the buyer would be responsible to repair damage arising from their investigation. The first step is to ask them to do so, that's the easy part. If they do not agree, then you would follow the procedures in your purchase agreement, such as mediation, arbitration, small claims, or a lawsuit (consult with an attorney). 2) Yes, the buyer must give you a copy of the report. Ask them for it, same as 1 above. 3) Maybe. Whenever a buyer cancels on the basis of any contingency, the reason for the cancellation must relate to that contingency, and must be in good faith. You will have to weigh for yourself the cost in time, effort, lost opportunity, money, etc. You should discuss it with your attorney. If you accept an offer from a subsequent buyer before the previous purchase agreement and escrow are property terminated, you are advised to consult with an attorney. An attorney that you consult with will likely advise you on the realistic risks, if any, of going forward in a subsequent sale. I am a real estate broker qualified to advise you on California real estate matters, not the law. If you desire legal advice, consult with an attorney. Hope this is helpful!
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answer by Kris Hakola    |   Contact Me
I am sorry to hear about your unfortunate experience. There isn't really an easy answer to your question. In a perfect world the answer would be that you would be compensated for your wasted time and damages to your home, but things never quite work out that way. If the home inspector damaged items in your home and you can prove it, you may be able to obtain a repair or compensation directly from the home inspector, although it is unlikely they will oblige. The buyer is supposed to give you a copy of the report, but this is a double edged sword. If they give you the report, all findings must be provided to the next prospective purchaser of your home. If you believe that the inspector was not competent, there might be findings that are inaccurate and you would have to disclose them regardless of accuracy. On the other hand, if the findings are accurate, it will give you a good idea of what kind of repair requests to expect. As for the buyer's deposit, it would depend on contract language in the purchase agreement and what is written in the cancellation of terms, but most likely, they would be entitled to their full deposit. If you choose not to agree to return their entire deposit, the deposit would remain in escrow and the escrow would remain open until a solution is reached between the parties. The problem with this is that you would not be able to open escrow with another buyer during this process. You will want to weigh your options here: time vs. principle. It most likely won't be worth your time and energy to go after their deposit and truth be told, you are better off selling your home to someone who would love it as much as you do. You still have time to find a new buyer and close escrow before summer is out. Best of luck to you. Kris Hakola RE/MAX Kings Realty
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