Question (IN): My wife and I entered into a real estate purchase agreement and were scheduled to close tomorrow. However, my Realtor called me today and informed us that the seller cannot pay his mortgage so we cannot close. This is the first time this issue was raised. What rights do we have?

Answer: When a seller communicates through the buyer's (your) real estate agent that he cannot close because he cannot pay his mortgage, the "something's fishy" smell should be your first reaction. To begin with, the only way the seller would not be able to pay his mortgage is: 1. If he or she were selling for an amount that is less than what is owed the lender plus seller's closing costs; and, 2. The seller's were unable to bring the required funds to the closing table. If that were the case, it would certainly be a substantive item requiring disclosure by the seller. However, it is possible the seller's agent did not know the actual amount the seller owed the lender.           

The section dealing with default in most Indiana contracts to purchase real property, states "... if Seller is in default due to Seller's failure to perform or comply with the covenants, conditions or terms of this contract, Buyer shall be entitled to pursue such rights and remedies as may be available, at law or in equity, including, without limitation, an action for specific performance of this Contract and/or monetary damages ... ."

The bottom line for you at this point, if you wish to recover any deposits, inspection fees, etc. from the seller, is you may wish to take your case to the Small Claims Court (often referred to as a "JP Court"). Indiana does not require that you be represented by an attorney to bring such an action, but if you choose to be represented you certainly may. Indiana has a $6,000 limit that can be brought before a JP Court, so if your costs are greater than that amount you may wish to contact an Indiana attorney to bring your case before an Indiana district court.

Question (MN): I bought a house in the May of 2005. I bought most of the home's furnishings. She left an old piano in the basement claiming that the person who was going to buy it backed out. She told me that she gave the piano to a local club that her late husband was a member of. My wife and the former home owner talked about us buying the piano after we closed on the house. This last summer the former owner asked if the piano was being used by my wife. I told her it had been used a few times in the past year.            

A few days ago, I received a phone call from the former owner claiming the piano. After 20 months does the former owner have any rights to the piano or any thing else in my house? Are there any Minnesota state laws that spell this out? This old lady is very used to getting her way. She owned a local furniture store.

Answer: The piano as well as any other property left by the previous owner may be construed as "abandoned" by the seller. Possession is 9/10 of the law when it relates to personal property, although there have been exceptions. One must ask, however, what does the prior owner have to prove it's hers? It may belong to someone else and the prior owner is stealing it! Life is never simple.            

It would certainly have been less confusing for everyone concerned if the former owner wanted any items of personal property that she left in the property you purchased, then she should have made written arrangements with you. For example, she could have included the items as "Non-Realty" items included in the sale (in which case she would no longer have a valid claim for them), or she could have entered into a lease with you whereby she maintained ownership of the items but you had possession.            

Apparently, however, neither the piano nor alleged other items of the prior owner's personal property were addressed in your real estate contract. The prior owner may just be bluffing hoping that she can coerce the property from you under the "threat" of a lawsuit. You can always respond that you've decided to keep the piano and all of the other items that she alleges were her personal property, until she provides you an itemized list (in writing) on all the articles and her proof of ownership of each item. It would be interesting to see how she responds.            

Otherwise, if you wish to obtain an answer to your question we recommend that you consult a Minnesota attorney to seek his or her opinion regarding the ownership of the personal property.

Question (OR): I am about to close on a primary home within the month. I just realized that my real estate agent had written, initially, "... seller to pay closing costs up to $6700" as negotiated. On a subsequent addendum, it said, "... seller to provide closing costs up to $6700."             

I then noticed that the negotiated price had increased by $6700. Does this mean that the closing costs are being financed by me instead of being "paid" by the seller? I do not recall authorizing this to my agent.           

What recourse do I have this late in the game? For background purposes, I am purchasing via real estate agent from a home developer. The negotiated price was 10K below asking price, but I am now getting financing for 11K above the negotiated price (i.e. 500k-->490-->now 501K).            

It seems that some of the concessions I had asked for (appliances) are also being financed and not "paid" for by the seller as we originally negotiated. Is there something wrong with this picture or is this just my naivete being a first time home buyer? Can I address this at settlement?

Answer: We assume that when you state you are purchasing from a home developer you mean that you signed a contract to purchase from a new home builder. Additionally, that the "real estate agent" you referred to in your email as "my agent" is representing your interests as a buyer in a fiduciary capacity and that you signed an "Exclusive Right To Represent Buyer" agreement as opposed to a limited agency agreement or some other agreement as outlined in the "Initial Agency Disclosure Pamphlet" required to be given to prospective buyers and sellers in Oregon.            

Given the above parameters, we find it alarming that you "became aware," or "just noticed," or "... I then noticed ..." sections of the original and amended purchase contracts. We are also assuming that you signed each and every one of those contracts. You have a duty of care to read and understand any and all contracts into which you enter ("sign") or, as an alternative, to hire an attorney who can explain the terms and provisions of said contracts.            

You ask, "Can I address this at settlement?" meaning, "The degree of discomfort you feel as to whether or not your agent is really representing your best interests." The answer is, "Yes. You can refuse to close." However, we do not recommend that. We do recommend that you communicate with the real estate agent who represents your interests asap and let him or her know exactly how you feel and why.

Question (VA): I am in the process of purchasing a home in Virginia that has a small propane tank out back to service a gas fireplace. When I called to find out the cost of refilling the tank, I was told the owner does not own the tank, but instead rents the tank on an annual basis.             

The fact that the owner was renting this unit was not disclosed. In fact, both Realtors had assumed it was owned. The cost of a new tank is about $600. It's significant enough to wonder if I have any legal grounds to ask that they pay for the tank.

Answer: If you are seeking a legal opinion, we recommend that you contact a Virginia attorney.            

When a property is purchased based upon a seller's "Disclaimer Statement" it is fundamentally purchased "as is" subject to any items disclosed in the purchase and sale contract (from the Virginia Disclaimer statement: "(a) ... a RESIDENTIAL PROPERTY DISCLAIMER STATEMENT stating that the owner makes no representations or warranties as to the condition of the property, except as otherwise provided in the purchase contract, ...").            

Also, in our opinion, had you purchased the subject property based upon the other choice the Seller had ("(b) ... a RESIDENTIAL PROPERTY DISCLOSURE STATEMENT disclosing defects in the condition of the property actually known by the owner."), there is no place on that form to disclose that a rented propane tank is required to operate the fireplace, and that the existing tank is not owned by the sellers.            

That is the type of thing one would expect the listing agent to find out from the sellers, or the selling agent (yours) to ask the listing agent when making your offer, provided it was not otherwise disclosed.            

A real estate agent should not simply assume an item is owned by the seller just because the item is located on the property. For example, washers, dryers, refrigerators and other appliances are seldom left on the property unless the item is permanently affixed or a non-realty bill of sale is included as part of the contract. If we saw a propane tank, our first question as purchasers would be "does it go or stay?" That should also be the first question a real estate agent representing the interests of a purchaser should ask, if the agent did not know.            

The other thing you might suggest to your agent is mediation, especially if that is provided in the Purchase and Sale Agreement you and the seller signed.