A case study you can profit from . . .

Patricia Davis, a single mother with a young daughter, was about to buy her first house. It was an exciting time for her. She rode the train from Stamford, Connecticut, where she was renting an apartment, to Bridge­port, where a realtor showed her a house that she liked. At $244,000, it was in a price range that she felt she could consider. She made an offer for $240,000 and it was accepted.

Did Patricia have an attorney to represent her, the realtor wanted to know? No, she did not. The realtor recommended a lawyer for her to use.  Conveniently, he had an office right around the corner from the realty office. Patricia went to talk to this man. She liked him. He reviewed the copy of the seller’s contract that the realtor had prepared for her to sign and got the process started. Patricia signed the contract, wrote a deposit check, and began to look for financing. But first, the lawyer and realtor both told her, she needed to have a property inspection to be sure that nothing was wrong with the house.

To simplify things, the realtor recommended a property inspector for Patricia to use. The next day, she met the inspector at the property. The first thing that happened was that the inspector walked into the base­ment of the house and said, “This place is not built the right way.”

He went on to explain that the wooden beams that supported the ground floor were sagging and had been jacked up to keep the floors to level. He then took her out to the street and pointed up at the roof. “Just as I suspected,” he said, “from that sag curve in the roof line, you can see that the whole house is sagging.”

Patricia was relieved. She called the realtor and said that she wanted her deposit back. “No problem,” the realtor said, “as soon as the inspector’s report comes in stating that there is a structural defect in the house, you will get your deposit back as stipulated in the contract, which states that you can cancel the contract if an inspection shows a ‘structural defect.’”

 

But then something odd happened. When the inspection report came in, it described the house in great detail, but neglected to use the words “structural defect.” So Patri­cia was still bound by the contract she had signed. In fact, the real­tor and the attorney both told her that the owner of the house was entitled to hold onto her deposit money until another buyer made an acceptable offer on the property. Patricia was astonished that she had gotten into such hot water by following instructions. Fortunately, it all turned out well when another buyer came along. But it was a sobering experience for a first-time homebuyer.

 

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