Hi,
I have a friend who thought they were close to buying a house. They were in attorney review period (in NJ). The 3 days had passed. I believe it was the 4th day when my friend called the realtor and asked what's up. The realtor said that she better call her attorney, because there's another deal on the table. My friend called her attorney who told her that they have withdrawn the house and are out of attorney review with another buyer! What recourse, if any, does my friend have? She and her husband, were never given any chance to up their offer, if that's what it would have taken. There was no conversation. The buyer just withdrew and supposedly had two offers on the table going at the same time, both in attorney review at the same time. I didn't know you could do that.

Hi,
Thanks all for the replies. I didn't rate the answers properly, because I'm not that familiar with this yet. Follow up question: what if the "other deal" came in after the 3 days of the attorney review period had passed. Does my friend then have a binding contract, and the seller must honor it? I'm thinking, maybe her attorney didn't advise of the end of the deal, because he/she didn't know about it yet -- or it didn't happen until after the 3 days attorney review. Is my friend privy to see the date(s) of the "other deal" to see when they made their "offer"?

Hi,

Thanks for the latest reply Lisa. It was very helpful. I gave my friend the info. In the meantime, she found out, that on the second day of the attorney review period, the seller's attorney had said that everything was fine and that the deal could be closed. This was never relayed to my friend. Instead, my friend's attorney sent a letter a day later,unbeknownst to my friend, saying they can't accept the contract as is, but rather needed many things changed, and submitted a long Rider with a long list of requests. My friend said she only asked a few questions -- such as, if there is a central vac, could they have the central vac equipment. I believe she said on the Rider where many things they didn't ask for. After the seller received this "disagreement" and Rider, they said they had another offer and were going with that one. My friend is furious now. What should she do? Is this malpractice? Or is it some violation of ethics, or real estate rules?

Hi,
Thank you Lisa, for your reply. I guess what is bothersome to my friend, is that she was never informed that the seller had accepted the contract. Also, she felt that the tone of her attorney's "reply" was harsh and antagonistic, and that if he had only cc'ed her, (however he never did -- she got the info from her broker, after yelling at her). If she had receive a copy of the "reply" letter, she said she would have asked her attorney to rephrase it, to clarify, that they do not REJECT the contract, but rather ACCEPT it, with some caveats. It probably is some ethics violation to not communicate properly with your client, and/or to send the wrong message without your client's consent, yes?

I'm not entirely sure about NJ law, but it's generally perfectly legal for the seller to be contemplating multiple offers, and to counter multiple offers if they want. And the seller can pick any of the offers that they want. It doesn't have to be the highest or best offer... they can decide to sell to someone because of entirely emotional, personal reasons.

Now, NJ may have laws about this that I don't know about, since none of my limited number of house-buying experiences has ever had anything called an "attorney review period".

Unfortunately it doesn't look like there is anything that your friend can do. The attorney review period allows either the buyer or the seller to back out of the contract during that 3 day period, for any reason whatsoever. The seller is not required to allow the buyer to match other offers that they might receive during the review period.

The only thing I find surprising is that your friend's attorney didn't contact your friend immediately to let them know that the deal was dead.

The only thing I find surprising is that your friend's attorney didn't contact your friend immediately to let them know that the deal was dead.

Just as an aside, your friend might want to rethink continuing to use this attorney. I agree with Lisa, that his attorney should have informed him as soon as he received word that the seller was backing out.

The contract becomes binding after the 3 days only if one of the attorneys has not sent a letter to the other stating that they disapprove of the contract in its current form. Once that letter is sent then the time stops while the contract format is negotiated. So it doesn't matter what day the other deal was made.

Well, the attorney sent the right message. The attorney has to either disapprove or reject the contract in its current form, and then say it would be acceptable if the following changes were made... and then give the list.

It never would have occurred to me to tell my client that the other side had accepted the contract, since, as a buyer's attorney, I wouldn't be able to accept it. Your friend shouldn't be offended that she wasn't told that. Her attorney was looking out for her interests, not trying to kill the deal.

From what you've said here so far it sounds like the attorney did everything that is normal and proper for standard NJ real estate practice. It's just that someone came along before the deal was final and offered more money, and the seller took advantage of the fact that the contract was still in attorney review to kill this deal and take the one that offered more money. This is not that unusual.

As for communication, the only thing that I find surprising is that the attorney didn't contact your friend the same day that he found out the seller took the other offer. That's the only thing that sounds unusual about this situation.

(BTW, in the future please don't start a new thread when you're discussing the same topic. It's confusing and hard to follow. You can just add your comment at the bottom of the current thread.)

I have tried to merge all of these separate posts, Please, PLEASE do not start a new thread for each reply, merely hit the answer button and answer your own question, this is put the follow up on the same thread.

Well, the attorney sent the right message. The attorney has to either disapprove or reject the contract in its current form, and then say it would be acceptable if the following changes were made...and then give the list.

It never would have occurred to me to tell my client that the other side had accepted the contract, since, as a buyer's attorney, I wouldn't be able to accept it. Your friend shouldn't be offended that she wasn't told that. Her attorney was looking out for her interests, not trying to kill the deal.

From what you've said here so far it sounds like the attorney did everything that is normal and proper for standard NJ real estate practice. It's just that someone came along before the deal was final and offered more money, and the seller took advantage of the fact that the contract was still in attorney review to kill this deal and take the one that offered more money. This is not that unusual.

As for communication, the only thing that I find surprising is that the attorney didn't contact your friend the same day that he found out the seller took the other offer. That's the only thing that sounds unusual about this situation.

(BTW, in the future please don't start a new thread when you're discussing the same topic. It's confusing and hard to follow. You can just add your comment at the bottom of the current thread.)
Thanks Lisa,
Will tell my friend. (Strange, that she is fighting over this house, when the market is supposed to be so slow! ) She is, nevertheless, not happy with her current atty -- thinks there should have been much more communication, and had there been, believes the deal may have been able to be salvaged. She found out, that the subsequent buyer, has closed with the same amount that she had offered -- so it wasn't that her amount was not as high as the second offer. Thanks again.