If you happen to watch Channel 3, you may have seen this 3 On Your Side story last night about a couple who purchased a Fannie Mae home but had the appliances stolen from the house in the two days between the final walkthrough and the actual closing.
According to the buyers and to Channel 3 reporter Gary Harper, the sellers tried to get Fannie Mae to replace the stolen oven, microwave and dishwasher but were rebuffed.
Lorenzetti and Cowand believe Fannie Mae is responsible. They claim the burglary happened when Fannie Mae still owned the house and before the keys were handed over to them.
“The agent is the one who spoke to Fannie Mae and she said, ‘Hey, we need these replaced.’ And they said, ‘It’s not our problem,'” Lorenzetti said.
For the record, the real estate agent (or brokerage) gave the buyers $1,500 toward purchasing new appliances. That’s the good news, on which we can all agree.
Having said that … Fannie Mae was correct. Stolen appliances were not their issue.
(Standard caveat – I’m a real estate agent, not an attorney and am not providing legal advice, etc., etc.)
Fannie Mae requires buyers to complete their Real Estate Purchase Addendum when buying a home. And in that addendum is section 9:
9. Personal property: Items of personal property, including but not limited to window coverings, appliances, manufactured homes, mobile homes, vehicles, spas, antennas, satellite dishes and garage door openers, now or hereafter located on the Property are not included in this sale of the Purchase Price unless the personal property is specifically described and references in Section 38 of this Addendum. Any personal property at or on the Property may be subject to claims by third parties and, therefore, may be removed form the Property prior to or after the closing. The Seller makes no representation or warranty as to the condition of any personal property, title thereto, or whether any personal property is encumbered by any liens. The Seller assumes no responsibility for any personal property remaining on the Property at the time of closing.
In other words, Fannie Mae is selling the house – the drywall, the frames, the roof, etc. Appliances are not considered part of the house and according to Fannie Mae’s addenda are personal property not guaranteed as part of the transaction. This differs from what is in AAR’s Residential Resale Purchase Contract but the AAR contract is superceded by Fannie Mae’s addendum.
HUD works much the same way – I helped buyers purchase a stove earlier this year to replace one stolen from a property on lockbox that was locked tight as a drum when we went to do the walkthrough (you do the math on that one.)
Admittedly, I’ve never discussed with a buyer that built-in appliances aren’t guaranteed to be replaced if stolen – I will now. I have, however, discussed that non-built in appliances such as refrigerators and washer-dryers left behind are not part of a Fannie Mae contract and will not be replaced if either stolen or recovered by the prior homeowner.
Whether these buyers had an agent on their own or were working with the listing agent is unclear. It wouldn’t have changed Fannie Mae’s stance, but at least there would have been a better understanding of the risks attendant in purchasing a bank-owned home. (I’d normally be able to see in the MLS if a second agent was involved but, oddly, this home is listed as back on the market as of November 1. Expect an update.)
At the end of the day, Channel 3 gets the story and a real estate brokerage is out $1,500 in spite of the contract. So while the resolution might be “right” by the buyers, it’s not at all correct according to the contract.
Editor’s note: I sent an e-mail explaining this same thing to Mr. Harper last night; no response has been received. My wife thinks I’m obsessed, but I’d rather see the public educated about what the addendum actually says and the risks involved rather than be given false hope should this happen to them.