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Each and every issue that you believe is important should be covered in the initial buy/sell agreement between seller and buyer. It is this agreement which establishes the rights and obligations of the parties. Unfortunately, many people mistakenly perceive that the buy/sell agreement only defines the price and, after agreement on price, the parties negotiate other items. All items of any importance should be included in the agreement, including: price, size of the property, any personal property included, whether or not a survey is included, whether title insurance is included, the treatment of real estate taxes, whether there are any contingencies, including a mortgage, or any inspections or testing. Michigan also requires that the seller make certain disclosures as to the property being sold, and the buyer must be given the appropriate materials as to the existence of lead paint.
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The allocation of the various closing costs will be determined by the terms of the buy/sell agreement. The costs which typically need to be addressed include: title insurance premiums, title insurance company closing charges, recording fees, transfer taxes, real estate taxes, assessments, inspection fees, survey costs. In addition, where the transaction is financed with a new mortgage, the buyer typically incurs a number of fees mandated by the mortgage company which buyer has chosen. Those fees can vary significantly in their amount.
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The only way to protect oneself is to have a well-drafted buy/sell agreement signed by all the necessary parties. Assuming the buy/sell agreement is drafted appropriately, and the homeowner still wishes to renege on the agreement, the only way to force the issue is to file a suit and involve the courts to force the seller to honor their obligations.
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Inspections are not required to make a purchase and sale agreement legally binding. Whether you wish to have inspections or not is generally a reflection of your comfort with evaluating the various components of the house you are buying: roof, structure, plumbing, electrical, etc. Once you have purchased the home, any problems will be yours to repair. If you are sufficiently experienced in these areas or are willing to assume the risk, you do not need to get inspections. If you do not feel comfortable with making this analysis, you are likely better off spending the money to have your purchase evaluated by a competent professional before proceeding with the purchase.
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This is one area of real estate law where your intuitive answer is probably correct. In a quitclaim deed, the seller simply deeds to the buyer whatever interest the seller has, no matter how imperfect the title. The buyer receives only whatever title the seller had, and inherits any problems that the seller had. If the seller did not have an ownership interest, the buyer receives nothing. A warranty deed includes the seller's warranty that he has title and will defend the title in case there are legal claims. If there are title problems, a buyer will have recourse against the seller if the buyer receives a warranty deed. While there may be instances of which your attorney can advise you that may justify accepting a quit claim deed for closing, as a general rule, buyers will want a warranty deed instead of a quit claim deed.
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A seller will want to cover all of the issues that a buyer wants covered in a buy/sell agreement, including price, size of the property, any personal property included, whether or not a survey is included, whether title insurance is included, the treatment of real estate taxes, whether there are any contingencies, including a mortgage, or any inspections or testing. In addition, the seller will want some time limits placed on resolving any contingencies, because the seller will not want to remove the home from the market for a lengthy period of time, unless the seller is assured that the contingencies are removed and the sale will proceed.
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No. Real estate agents do provide a valuable service, however. They have the ability to market. They have a network of realtors with whom they cooperatively work, and they are generally trained to 'close the sale' (the sometimes difficult task of getting people to stop talking and instead making a written commitment to either buy or sell). If you believe that you can adequately handle those challenges, an experienced real estate attorney can guide you easily through the drafting and reviewing of the buy/sell agreement and making the necessary arrangements to complete the sale of the property.
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Michigan requires the seller to give a disclosure to the buyer. Beyond that, no disclosures are necessary except that if any statements are made, they must be truthful and accurate. While a buyer may decide to go through with a purchase without a disclosure, until a disclosure is appropriately given to the buyer, the seller cannot enforce the buy/sell agreement, even if it is in writing.
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While a buyer can sometimes force a seller to sell a home (in a legal action called 'Specific Performance'), a seller has no equal remedy. A seller is limited to obtaining damages from a reluctant buyer. The seller must attempt to re-sell the property. Once that has occurred, if the seller obtains less for the property than from the original buyer, and the difference is significant enough to justify the attorney fees, the seller can sue the buyer for the difference in price. If the buy/sell agreement is written appropriately, the seller should also be able to keep any earnest money that the buyer deposited. However, if there were legitimate contingencies in the buy/sell agreement, the buyer may be justified in not completing the sale, in which case the earnest money would likely have to be returned. This is the primary reason why a seller would like to have the earnest money be a significant amount. The higher the amount, the more unlikely it is that the buyer will risk withdrawing from the purchase agreement.
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By all means. If you are unable to refinance it, you still own the home and are entitled to sell it and pay off the existing mortgage. Even after the foreclosure, there is a redemption period in which you are entitled to stay in possession of the property and attempt to redeem it from the foreclosure sale. You can sell the property even during this time. Obviously, the sale price would have to be sufficient to pay off the mortgage, but even at this late date, you would be entitled to retain any surplus or equity.
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Unfortunately, this could be expensive for you. Depending on your relationship with your builder, the builder may not be quite as willing to sharpen the pencils for changes as he was when he was motivated to get the original contract. Nonetheless, the only way to proceed is to discuss the potential changes with your builder at the earliest possible time and solicit a cost quotation for those changes. Only then can you make an educated decision as to whether or not you wish to proceed with the added expense. I encourage builders and homeowners alike to place their changes into a written agreement. Written agreements serve to bring things into crystal clear understanding.
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No, not if you have adequately described the situation to me. Are you sure that someplace in the body of the documents you signed, you did not agree to make the payments requested? The issue should be easily resolvable. Your builder, if asked nicely, should be willing to point out the specific place in the contract where you agreed to those charge. If he will not (or cannot), there may not be justification for the charges and you are justified in not making payment until the appropriate explanation is made.
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Under the appropriate circumstances, arbitration or facilitated mediation can be an attractive alternative. Your attorney can assist you with these processes as well as assist you in evaluating whether the processes will be the appropriate alternative for you, based upon potential results as well as costs. One critical factor to be remembered is that all parties must be willing to use the other alternative to litigation. Litigation is the only alternative, which can be unilaterally mandated.
