When purchasing a home, is it misrepresentationif we were told the home was built by a particular builder and find it wasn’t?

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When purchasing a home, is it misrepresentationif we were told the home was built by a particular builder and find it wasn’t?

Have accepted offer on home. Purchased based on the information provided by listing agent that a particular builder built home. It was important to us. Found out through seller it was built by another builder. Listing agent did not provide information maliciously to mislead, but did verbally represent information and we bought based on that. Only contingency is loan, which is approved pending appraisal. House will appraise. No longer want to buy the house. Do we have cause or can seller sue us for specific performance?

Asked on November 1, 2010 under Real Estate Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) If in the contract there is clause, term, etc. identifying this home as built by that builder and it is not, there is a breach of the contract. Whether that breach would allow you to terminate the contract without consequence depends on how material, or important, the breach is. In this context, materiality is not necessarily judged by your subjective standards--e.g. how much you want a home by that builder--unless you made it clear to the other party that this was central to your decision to buy. Otherwise, the impact of the breach would be judged by the effect, if any, on market value of the home by having it built by someone else.

2) If it's not in the contract, then  you recover damages or possibly rescind the contract, you'd have to show that the seller or his/her/its agents committed fraud, which involves deliberately making a material or important misrepresentation. As a general matter, an innocent error is not fraud and will not result in rescinding a contract or even damages.


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