How the Home Purchase Fell Through

There is no joy in ANCIANT land; our home purchase has fallen through.  Yesterday was a dark, hard day.  It was 110 outside, for one thing, and even though we had the AC on inside it was still sweltering.  Plus I hadn't slept well the night before, and all day I felt kind of dizzy and tired.  And then, the house....

As you know if you've bought a house, throughout the process of escrow buyers have several opportunities to exit the deal.  Contingencies, they're called.  For us the only relevant contingency was Inspections.  Inspectors come out to look at the property.  They make sure it's structurally sound and they identify any hidden problems.  If there are problems you ask the seller to fix them (or, more often, you ask for money to be taken off the price off the house, which you then use to make the necessary repairs).

Last week, our realtor had a number of inspectors come out, and we hadn't turned up anything major (there were some termites, and there were mild drainage issues).  But he wanted also to get something called a HydroStatic test.  This is a test in which they pressurize your outgoing water pipes and see if there are any leaks.

It's not a test everyone effects; most realtors will get a basic inspection report and maybe on top of it, a structural report.  But our guy (who's fantastic, btw--if anyone needs a realtor in (CITY) let me know)--gets as many inspections as possible.  In part, he wants to do his due diligence, but he also wants to increase his own bargaining position going into the inspection negotiations (the more things you can find wrong, the more you can ask for).

So, he wanted the HydroStatic test.  And the sellers, at first, refused.  They had to sign some kind of waiver to allow the Testing Agent to go in and pressurize their pipes, and somehow last Friday they "couldn't be found" in time to sign said waiver.  But our realtor pursued them, and he got it set up so that the test would be done yesterday--Monday.  Which was the last day we had to negotiate our inspection contingency. 

The HydroStatic report showed that the pipes on the left side of the house (site of the Master Bedroom) were leaking fluid into the area underneath the home's foundation slab.  This was very bad--and something that has to be fixed.  (If not, you risk softening and ultimately destroying the foundation).  The cost to do so was twenty thousand dollars.  And this, at least from our point of view, was not a negotiable repair--you can't move into a house where water is pooling under the foundation. 

Well, you can, but it seems stupid.

Keep in mind that we had to have all this negotation finalized, and a final number agreed upon, by 6 pm on Monday night (8 PM central time).   We've just gotten the HydroStatic report at 5 PM (our time).  We have an hour.  So this is a very hectic and tense time (in our sweltering, sweltering house).  Remeber, we not only asking for the pipes to be fixed, we're also asking for a lot of other smaller repairs (drains, termites, etc).  And we're trying to decide, as we wait to hear from our Realtor, the minimum amount we would accept in repair allowances.  They've already promised to give us money for the termites (that's about 4k).  We're assuming they're going to give us the money to fix the pipes.  But will they give us any more?  They should but how much more?  That's what we're wondering.

The answer is: zero much more.  Not only will they not give us any additional money, they're refusing to give us enough to cover the plumbing fix.  Their total number turns out to be 8k.  That's for everything.  The termites, the pipes, the drains--all of it.  So that's very bad.

And that's not all.  Our HydroStatic guy has had, for some reason, to have a phone conversation with the Seller.  What he reports back to our realtor is that the he believes that Seller KNEW THE PIPES WERE LEAKING FROM THE START.  HydroStatic can't prove this conclusively, of course; the Seller hasn't come out and directly stated that he knew--to do so would be admitting to an illegal fraud.  But based on the Seller's deep familiarity with HydroStatic testing, and judging by some very pointed 'in the know' questions Seller has asked, HydroStatic guy is confident the Seller knew the whole time.  He's been trying to con us, in other words.

Later, the Seller's Realtor ("Sara") concludes essentially the same thing.  This is after the deal has collapsed; she has called our Realtor to apologize for how it all went down.  She was acting on behalf of friend, and she had no idea that they were up to something.  But now, in the light of what's been discovered, she's gone back over their interactions and put together other fragments of their conversation, and she thinks it smells bad.

(The Seller, I should note, just to finish up on the scintiallating 'pipes discussion'--has had their house partially--but not entirely--repiped three years ago.  So they're likely to be very cognizant of the pipage situation in their home). 

Anyway, it's all very sad on many levels.  I feel great anger and rage against the sellers, who have revealed themselves as liars and frauds.  I'm sad we didn't get the house.  I'm sad and weary that we have to go through this whole process again.  And I'm glad we have a good realtor, who was able to ferret out this deception before we got took.

From the start of our interaction with these sellers, my wife has been calling them 'squirrley.'  And I have been saying she was wrong.  But I was wrong.  She was right.  I guess she sensed from the outset, that they were no good.  And, credit where it's due: she was right.  I think it just never occurs to me, in these situations, that people will deceive you.  I think I assume that everybody in the world is like my parents, and they all act with integrity, and that their word is their bond.  [That to me, is what it is to be an adult.  It's certainly what it means to be a man.  Integrity.  Your word is your bond.  All that good stuff.]  So I'm kind of just...at a loss when I learn people are otherwise.  Which, I suppose, shows how naive I am.    

A final note--now that Sara knows about the plumbing leak in seller's house she is obliged, legally, to disclose said leak to any new potential buyers.  If she fails to do so, she could lose her license (and Sara, we're confident, is an honest person; she's on the hook for any of this).  What that means is that the Sellers are going to face the same negotation about fixing the plumbing with whoever they find to buy the house.  Now, possibly a new buyer might accept the leak--they might not insist on the repairs being made.  But that seems unlikely (would you buy a house knowing that water was leaking under the foundation?) 

The Sellers could get around this problem by firing Sara and bringing in a new agent.  Doing so would make it possible for them to continue to hide the information about the leaking pipes to new buyers (the new agent would presuambly not have been told about the plumbing problem).  However, our agent has already indicated that, should the Sellers puruse that parth--should they fire Lisa and hire a new Agent--he will make sure and be in touch with anyone who enters into escrow to buy the house, to make sure they know about the leak.

Also, we're going to where they live, these sellers, in Wyoming, and burning down their house.  At least that's my thought.  And the land will be sere and dark wherever they may dwell, and their children shall eat the crusts of broken bread, and locusts and plague shall be their comforters, in their dark streets of Babylon.