What is the penalty for genuine estate misrepresentation?

Question by Cara P: What is the penalty for genuine estate misrepresentation?
My husband and I are/have been in the procedure of purchasing a property. We had a satisfactory inspection, appraisals were great and we have been 2 weeks away from closing when we obtained a letter from the vendor stating that he had knowingly misrepresented the residence in the vendor disclosure. He signed a letter stating the factors that he had misrepresented. We had a contractor go to the home nowadays to give us estimates on what the misrepresentations would value to fix. We nevertheless extremely considerably want the residence but want the vendor to make restitutions for his lies. What are our rights? Our attorney has stated it would be less complicated to just stroll away from this but we would be out 3,000.00 for appraisals & inspections. Please advise….. isn’t fraud a crime even if a single confesses it after the fact?

Best solution:

Solution by Debbie2243
buy it “as is” and do the repairs your self..inform him to decrease the value according to repairs needed…and appreciate your new residence…

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Originally posted 2014-05-20 09:35:03. Republished by Old Post Promoter

5 Responses to What is the penalty for genuine estate misrepresentation?

  1. Repo4Sale

    Let’s get to the “satisfactory solution”…. money judgement in a civil court is not worth “toilet paper”… trust me. I’m an X-real estate paralegal, vet of over 110 cases. Your headed for that “court case” to collect a money judgement. If you get the judgement, it’s toilet paper or mulch! Just cancel the escrow and submit the “letter from the seller stating the misrepresentations”… Escrow will accept it!

    Move on to a beter deal! Don’t deal with a LIAR!!


    The attorney is right! However, you can ask for a seller contribution of $ 3,000. Have them add that to the purchase contract! Also, you might run into problems with your financing! If the appraisal indicates that the value is subject to these repairs, then the repairs MUST be done first before you can close on the loan!

  3. Littlebigdog

    Real Estate Fraud is occurring much more frequently now than ever before. It is very important as real estate professionals that do business the ethical way that this stops. Below are a few tips to protect yourself if you feel uncomfortable in a transaction
    Document the Situation: Prepare an Amendment to Contract to be signed by all parties.

    Disclose Information: Disclose all changes to the funding lender and obtain their written approval.

    Verify the HUD-1: Verify that the HUD-1 Settlement Statement accurately reflects the transaction and any rebates, allowances, discounts, etc.

    Report: If you suspect fraud report it!

    Withdraw: Before you become involved in illegal activity you can withdraw from representation.


  4. txrealestateagent

    A few options for you:

    1) Ask the seller to do the repairs before closing.
    2) Ask the seller to give you sufficient money in closing costs so that you can do the repairs after closing.
    3) Ask the seller to reduce the price of the house by the appropriate amount.

    You do not want to ask for money and roll it into the sales price. While that is a technique used in real estate, the buyer ends up paying interest on the money given to them by the seller.

    I think the options I listed above are your best choices to continue moving the deal forward and also get some reliev because of the minreprensation.

    I would also suggest that your real estate agent stand up for you and let the seller know how upset you are.

    Good Luck.

  5. triad_historic_homes

    While agree with the most of the options presented, there is one other one: Demand that the seller agree to terminate the contract and make you whole for your loss, i.e. the $ 3,000 you’ve paid for appraisals, etc.
    I had a similar situation when a seller misrepresented a house and I, as the buyer’s agent discovered the misrepresentation after my clients had spent about $ 500 on inspections.
    We demanded (with threat of legal action, both civil and criminal) return of all earnest monies and what my clients had spent.

    It worked.

    You can also do the same thing through an attorney (so it shows up on their letter head. That would be a next step.

    One word of caution: Misrepresentation is not always Fraud.
    Misrepresentation can be both willful (he knew otherwise) or negligent (he didn’t know he was wrong) the former is arguably fraud,. The latter is not.