Q: I am under contract to buy a single home in Fox Chase. My mortgage lender had an appraisal done and they required a couple repairs. The seller refuses to do the repairs, and wants to back out of the agreement unless I do the repairs myself before settlement. I don’t want to. I realize I will be eating my home inspection fee, but will I at least get my deposit back?
A: The seller does not have to automatically agree to do any repairs, even lender or casualty insurance required repairs. It sounds like you are using an FHA loan, because usually it is an FHA appraiser who will ask for repairs to be completed by the property seller.
In the event the seller refuses to do your lender-required repairs, the Pennsylvania Agreement of Sale does allow you to offer to do them yourself prior to closing. But it doesn’t require you to do them. If the seller is intent on not doing the repairs and you don’t want to either, then get out of the sale. You will need to send the seller written notice to terminate called an “Agreement of Sale Release.” This agreement spells out the terms of the return of your deposit.
It sounds like a no-brainer, but it is not always so cut and dry. Check your contract. You must adhere to the timelines in the agreement of sale so you do not accidentally fail to respond within the time stated or you could find yourself forfeiting your deposit.
If the seller refuses to sign the release and wants to try and keep the deposit, you should consult an attorney. The seller may very well have violated the contract and you may very well deserve to receive your deposit back. However, the seller’s real estate broker is legally obligated to hold all deposits in an escrow account until agreed to by the parties, or ordered by a court.
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.