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The property was damaged after it went under contract. What are you options?

Severe and unexpected weather in Texas is not usual. We have experienced flooding and tornadoes that caused damage to properties. Not all are weather related. On occasion a property may be vandalized or theft may occur. These and other perils can also affect real estate transactions that haven't closed.

 So, what happens if you are under contract and the property is damage? 
The Casualty Loss Paragraph requires the seller to restore the property to its previous condition by closing. If the seller can't, the buyer has a few options:

  • Terminate the contract and get your earnest money back.
  • Extend the time for the seller to complete the repairs up to 15 days, with the closing date extended accordingly.
  • Accept the property in its damaged state with possible insurance proceeds, if permitted by the seller's insurance carrier. The seller also credits the buyer the amount of the insurance deductible at closing. If the property is being financed, this might not be an option.
  • Sales price or closing costs can be amended to cover the damage (if applicable). If the property is being financed, this might not be an option.

However, the buyer cannot cancel the contract without giving the seller the opportunity to remedy the situation. If the buyer attempts to do so, he may likely forfeit his earnest money and could be subject to the specific-performance provision of the contract.
Issues may come up when the parties disagree whether the property has been restored to its prior condition. If a dispute arises, that determination could be made through mediation or in court.
If you have any questions or if you would like assistance in buying, selling or renting give me a call. I'm happy to help.



Ali Palacios, ABR, MCNE, TAHS
Realtor
Today's Home Realty
ali.palacios@todayshomerealty.com
Mobile - 832-418-0670
Fax - 832-201-7492
www.todayshomerealty.com
www.ilovehappyclients.com

9119 Hwy 6 S #230-116, Missouri City, TX 77459


Home buyers and sellers beware: http://homes-sale-richmond-texas.blogspot.com/2016/02/home-buyers-and-seller-beware-wire.html
Rental fraud alert: http://homes-sale-richmond-texas.blogspot.com/2016/02/rental-fraud-alert-texas-luz-astacio.html



About me: http://www.ilovehappyclients.com
Professional Memberships:

  • Houston Association of Realtors®
  • Texas Association of Realtors®
  • National Association of Realtors®
  • Accredited Buyer’s Representative – ABR
  • Master Certified Negotiation Expert – MCNE
  • Accredited Staging Professional – ASP®
  • Texas Affordable Housing Specialist – TAHS
  • Women’s Council of Realtors®
  • National Association of Gay & Lesbian Real Estate


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