What Are the Buyers Options When the Seller Refuses to Honor a Contract After Home Inspection?

What Are the Buyer's Options When the Seller Refuses to Honor a Contract After Home Inspection?

When a home purchase agreement has been signed and a home inspection reveals defects, the next step can be complicated. This guide explores the options available to the buyer when the seller refuses to sell, as well as the legal remedies that may be pursued.

Understanding the Agreement

The first step is to understand the terms of the purchase agreement. Typically, in a standard purchase agreement such as those used in Michigan, the buyer has two primary options if the inspection identifies defects:

Accept the house 'as is' with all faults: Pay for the necessary repairs yourself.

Reject the purchase agreement: Terminate the contract and proceed with a different home purchase, keeping in mind that only the deposit is usually refundable.

Both parties have the option to cancel the contract if they agree. However, if the buyer wishes to proceed further, they can initiate legal action seeking specific performance. This is a remedy that compels the seller to fulfill their contractual obligations, essentially forcing them to sell the house to the buyer.

Legal Remedies and Specific Performance

Specific performance is a legally binding order by a court that the seller must honor the sale. This remedy is unlikely in typical residential settings but may be more applicable in unique situations, such as the sale of a historic home. If the seller still refuses, the buyer can sue for breach of contract, seeking damages for the losses incurred and potentially any additional legal costs.

Navigating the Legal Process

It's important to note that specific performance cases can be challenging and costly. Bringing a lawsuit should be considered carefully and only after consulting with a qualified attorney. A legal review of the agreement is highly recommended to determine the best course of action.

Real-life Experience and Advice

One buyer's experience offers a relatable perspective. In a similar situation, the buyer negotiated for the seller to return all incurred costs, such as inspection and loan application fees. Sometimes a courteous and cooperative approach can result in a quicker resolution without resorting to legal action.

According to Bart Hawkins' advice, it is wise to be gracious if the seller decides to back out, instead of aggressively pursuing legal remedies. The goal should be to minimize the impact and move forward with a new property if possible.

Conclusion

In cases where a seller refuses to honor a home purchase agreement after a home inspection, buyers can pursue specific performance or breach of contract, but this usually requires careful consideration and a legal review. It's essential to explore all options and seek professional advice to navigate the complexities of the situation.

Keywords: Home inspection defects, specific performance, escrow deposit, breach of contract