Let's play pretend like we did in kindergarten. Let's pretend the house in the picture is the house you wrote a purchase agreement on 3 weeks ago. The sellers accepted your offer to buy; you've done your buyer's home inspection; the mortgage has cleared and you're anxiously awaiting closing day at the end of the month.
Every time you leave the house, you drive by. Sometimes you drive by more than once a day. Today, however, you get the shock of your life. You had heard about last night's storm but didn't realize it was all that bad. A tree fell on your porch and ripped part of it off of the house. You are really worried because this is your dream house and you don't know what to do. You don't want to lose the sale, but you also can't afford to have the porch fixed!
Like all pretend stories, someone comes along to tell you, "Don't worry! Be happy!" That "someone" is your St. Paul real estate agent. S/he calls you to let you know about the damage to your future home. Your agent tells you not to worry. There is a clause in the purchase agreement titled "Risk of Loss" (page 4, 2006 approved forms). It says in part, "If there is any loss or damage to the property between the date [of the purchase agreement] and the date of closing for any reason . . . the risk of loss shall be on Seller. If the property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. . . . If Buyer cancels . . . all earnest money paid hereunder to be refunded to Buyer."
Your agent goes on to ask if you want to continue to buy the house if the seller has the porch repaired or if you'd like to cancel the purchase agreement. You decide you still want the house IF the porch is fixed and sign an addendum to change the closing date to the following month to give the seller enough time to make the repairs. The seller's insurance should pay for the repairs and you'll have a new porch!
OR you might decide to cancel the purchase agreement. The seller is required to sign the cancellation and you will get your earnest money back.
In both scenarios, the seller has to make the repairs or clear the debris. The presence of a purchase agreement clearly tells the buyer what will happen when something happens to their house. It's all there on page 4 of the 2006 edition of REALTOR® approved purchase agreement. If the house burns down, blows away, or has a tree on its porch, the home buyer is not responsible. The home seller, however, has a problem!
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