[Krnluve24]

Hello everyone,

This is the first time I am posting so please be easy on me. This might be a bit long but I want to paint the full pictures hoping I can get some good advice.

I am in a real predicament here as I backed out of a home purchase after I waived all contengencies.

Long story short, we are looking to buy a home in Virginia for $450k. Our agent suggested us to put down $10K and waive all contengencies except for Home Inspection to motiavate the seller to sell. I knew something was not right as the earnest money was larger than norm in our current market condition which I think the seller is more desperate than us. I didn't think much about it since we were determined to purchase and half of the time it was my wife doing the dealing and signing the papers. Turned out we had some real financial and legal problems which prevented us from going through with the purchase. The deadline to legally cancel has past which we default by breach of contract. Please note that our agent also suggested a quick settlement which the total time from the ratification of the contract to settlement was less than 20 days. We were really in a spin and we trusted her... I so regret.

I have already stopped the loan and meanwhile our agent was trying very hard to convince us that we need to buy it or we are in big trouble. I figured I would lose the $10k but our agent was telling me that they might sue for more. She finally gave up and we signed a withdraw stating we will be released of all obligations if they take our earnest money; the seller has not yet responded. Please note the seller is actually an investor/broker who never lived in that house and the house is currently vacant.

Here is the twist, two days after we signed the withdraw, our agent said her broker wanted her to pursue for the commission. Call us stupid but we did not read the contract between our agent and us which a section on the contract stated if we default, we have to pay her the commission. Here is another twist, our agent wrote the wrong year on the date where it said contract termination. It basically read as the contract will be void if after March, XX 2007.

Here are some questions I have:

- I really don't think the seller incurred much damage since only 20 days has past, at least not $10k worth. I know I'm not the one determining that but are they entitled to the whole $10k without proving damge? (The contract did say the seller are entitled to the entire amount of earnest money if they so choose not to pursue for more damages.) I guess what I am really trying to understand is, if we do go to the court, will I have a chance to pay less than 10k worth of damage? (Another note, that house has been on the market for 4 month with no offer except for ours.) I guess it doesn't matter because I would be paying a lot more on legal fees, but I asked, just in case they decline on the earnest money and decided to sue.

- What can they really sue for? Emotional damage? Loss of time?

- Since the seller is an investor and he is actually THE broker of the seller side, can they sue for the commission they lost? I don't know if there was even a commission involved on the seller's side but the contract stated if the seller accept the earnest money, their broker will be entitled to half of it. The contract did not say who pay for the rest.

- Can my agent sue me? Knowing that she wrote the wrong date on the contract termination, which to me, it sounded like the contract was void at the time of signing.


I started to have some conspiracy theory about our agent been unethical which her suggestions were designed to prevent us to have very little outs if we changed our mind. She wanted to make sure we will not default no matter what was the circumstances or financial difficulties. She was fully aware that we have "money and leagal problems" but she still took the job.

I will here thank everyone who is reading this. Even if no respond here, I hope this will save someone else from our mistake. From here on, I will read every single line on every single contract I encounter in the future.

Thanks again.

[excon]

Hello K:

You MAY have recourse against the realtor and/or the seller. If it can be shown that they individually or separately, acted unethically, you certainly do. From what you say they MIGHT have. Of course, you're going to have to hire an attorney. Had you done it the first time around, there wouldn't be a second time.

excon

[froggy7]

You agreed to waive all contigencies except the home inspection, knowing that you had financial and legal difficulties. And then didn't leap on something in the inspection to back out of the deal? The broker is right... you are in big trouble. I believe that the seller could technically take you to court to force you to conclude the deal, so you may be better off to just accept the 10K loss.

For future reference, your agent can help you craft your offer, and is going to do so in the best way to get you the house that you want to buy. This may include higher earnest money, shorter timelines, and waiving contingencies. It's your job to make sure that you can live with the strategy that they come up with. All my last purchase offers were made with "contingent on selling my current house" in there, because I was more willing to walk from a house that I wanted than I was to be stuck with two mortgages.

You may have a case against your agent if she somehow got you to make an offer on a house that you definitely couldn't afford. But your case against the seller is going to be harder, since you did enter into that contract wth him. Which you could have done without your broker.

[Fr_Chuck]

Sorry you are wanting a simple out that is just not there,
Normally a wrong year in the date will not have an effect on the contract, if it is a obvoius error and was acted upon as it it was the correct date.

what can the seller sue you for, depending on the contract, if they sell the house for less than your offer, they could sell for the difference, or they could even sue to force you to comply ( or order you to buy the house)
Not seen it done though. And of course the broker ( that is who gets most of the commission) wants the agent to push it, and you can expect them to sue you if you don't reach a settlement with them. Remember 6 percent of 450,000 is a fairly large sum that you have just decided to void when you backed out. So you can be held liable for their commission money since there was not a legal reason to void.

What you make the error in, was not finding some reason in the home inspection not to back out.

[Krnluve24]

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[Krnluve24]

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[Fr_Chuck]

There are always things wrong with a home, if you know you have to get out of it, you hire a contractor for the suspecific purpose of finding problems, cracks in the foundation, insulation at below normal levels in certain areas, draft issues around windows, You take me into a brand new home and If I wanted to find a two page list of things wrong I could, esp if it was going to save me 10,000.

And of course you want a simple way out of it, I wouild, and I wish I had one for you. And just because they are real estate agents, remember they are normally working for the seller, not working for you. If you want one to work for you, what you do is go and hire one for a price to be a buyers agent, to work for you, not for the seller.

But I doubt the seller will do anything except keep the 10,000 and keep trying to sell the house,

But you should expect the broker and agent expect to get their money, It was payable upon the sellling of the house, and since there was not a reason by contract for them not to get paid, Most likely they may settle for less but if you were to pay a 6 percent commission ( and I say that because that is what is in the ones I use here)
So what you have to deal with is the listing agent ( who ever that may be) the broker from the listing company, the broker from the selling company if they are different from listing company and the sellig agent.

Now they really don't want to go to court, since that will really look bad, a real estate company sueing its client. Not good for business, but again, we are also talking about @ 27,000 in commissions that this group of people are losing. And in this slow market, that broker may be needing the money. So you need to be looking to settle with them.

[Krnluve24]

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[froggy7]

No, the contract having an incorrect year in the ending date is not going to nullify it. Think about it... if your agent suddenly just stopped working with you because of that, would you think it was a good reason?

And, since you could get the mortgage, but chose not to, you are in even worse shape. Your agent can only act with the information that they have at the time. You told her you could get the mortgage, you actually were able to get the mortgage, so waiving the finance contingency is not a bad strategy in a house offer. If you hadn't found out what you did on Christmas Eve, would you still be saying that your agent had messed up? No, you would be happy because you had a very nice house. And if you have issues with the tactics that you agent is using, then you stop working with them.

The bright point is that the buyer's agent is generally only getting 3% of the sale price as commission. It's generally 6% overall, but that gets split between the seller and the buyer agents.

[oneguyinohio]

Did the agent disclose to you that her broker was the owner of the home? In some states, that is required as part of full disclosure? Maybe your attorney can help?

[Krnluve24]

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[Krnluve24]

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