Advice Needed...Please

By
Real Estate Agent with Cherimie Crane & Associates, Ballenger Realty

I will do my best to explain this conundrum without disclosing too much information that may in any way effect my sellers.

 Facts:

  • My clients had their home on the market for 164 days.
  • The property was priced BELOW appraisal
  • My clients responded to feedback from Realtors, and did ALL suggestions for a better sale
  • Their property was marketed to the extreme! Open Houses, websites, the whole nine yards
  • The property had several showings
  • They wrote an offer on another home CONTINGENT on the sell of their home.
  • The contract on the new home was soon to expire
  • My clients had no offers on their residence.
  • They decided to withdraw their listing until the market picked up
  • They requested a release of contract based on their home not selling.
  • My clients are now facing possible litigation of Specific Performance for withdrawing the listing.

The sellers of the home that my clients had an offer on, held the release of contract form for almost 3 weeks with no communication. ARGHH...I called the Listing Agent, the Listing Agent's broker, and the attorney. Finally I got an answer after weeks of wondering!!!

My clients sincerely wanted the home they wrote a contract to buy. Their decision to withdraw the listing was a personal one. They did not want to "lead on" the sellers of the other property when they felt that their home just was not going to sell. The Release form was accompanied by a letter written by my clients explaining their situation.

I understand it is a difficult market but I must say, I haven't experienced this before! Any advice!?!?!

 

 

 

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Rainer
8,038
Shelby Morris
Realty Exchange - Columbia, TN
I had a similar situation recently.  The bottom line is, a contingent offer is contingent for a reason.  If the house doesn't sell, the contingency isn't met and your client can walk away.  By the actual word, it doesn't sound like you had a requirement that your client's home remain on the MLS.  In my case, the agent for the seller decided to lower their price beyond my client's offer and not allow my client's to renegotiate.  My response was "Go right ahead, I will simply raise the price of my client's home by $5000 to make sure we don't pay more for the house than you are now offering it to other potential buyers."  As you can imagine, the other agent wasn't happy.  I got brokers involved, we ended our purchase agreement and got our EM back.  And the best part - that was 6 months ago and the property is still on the market.  My clients let their listing expire, kept if off the market for 3 months and just went back on at the first of the year.  Use financing contigency to end the contract - can't get financing if they can't sell.  If you have to take this before the board to be settled, you will win.
January 21, 2008 03:07 PM #22
Rainmaker
1,345,282
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Short Sale - CDPE, REDS

  Isn't there a financing contingency as well ? Obviously they could not afford to pay 2 mortgages...how  could the contract be "open ended"...They would buy the house if theirs sold in this lifetime ?  It sounds like there is a part missing....

January 21, 2008 03:22 PM #23
Rainmaker
133,730
Jennifer Kirby
Kirby Fine Homes - Minneapolis, MN
The Luxury Agent

with such a vague contingency agreement, seems to me the other party doesn't have a leg to stand on. If the listing agent didn't return my phone calls with-in a few days, or told me they were on vacation, I would have immediately contacted their broker, after all, it is their listing, and told them what was going on. And the other agent was just plain dumb to take the home off the market completely, and also not have a Right of First Refusal on the contract.

I will be really suprised if your clients don't win....keep us up to date!

January 21, 2008 03:34 PM #24
Rainer
9,364
Adrian Alvarado
MGR Real Estate Inc. - Ontario, CA
Inland Empire Real Estate
It seems you have a problem on your hands. Unfortunately this is what we will be seeing in the near future as the market continues to adjust. Unsatisfied sellers and money hungry agents. Your problem depends on what they want exactly. Does the seller want to sue for specific performance or are they just after your clients deposit. If they want the deposit then you will have to come to an agreement between seller and buyer before any funds are released. Escrow will hold on to the earnest money deposit for up to one year. In our state we have a arbitration clause to try and mediate before any decides to file a lawsuit. Good luck with everything.
January 21, 2008 03:47 PM #25
Rainmaker
261,430
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI
This is kind of a mess. There should have been a provision for the buyers to withdraw their offer after a certain time or with notice. Live and learn. Around here, if you use our standard sales agreement, the buyers liability is limited to the amount of the earnest money deposit. Good luck. I think your side will eventually prevail.
January 21, 2008 04:52 PM #26
Rainmaker
477,913
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Michigan
Sticky situation. Did their time on the contract with the new house expire first or did they just decide well it's not selling so lets can the deal. was there a contingency in palce also for a period of time. Could they have waited until that expired?  Just some questions in my head.. I wish you well..
January 21, 2008 05:08 PM #27
Rainmaker
287,238
Cherimie Crane
Cherimie Crane & Associates, Ballenger Realty - Beaufort, SC

Again, thank you so much for all of your valuable advice. I have always considered myself to be extremely thorough in protecting the rights of my clients. I did contact the broker of the listing agent immediately, and yes there was a time frame on the contingency. I am trying not to give ALL of the details so not to disclose any private information in reference to my clients. My clients attorney seems to think we will ultimately prevail based upon the terms of the contract.

My frustration lies mainly in my inability to get information in a timely manner to my clients. I spent each day trying to explain to them why another Realtor, refused to return a phone call.

I have learned a very valuable lesson...I now know how crucial an AVAILABLE attorney can be. I also will be even more cautious in contingency situations. In this "shifting market" atmosphere there are many lessons to be learned. I suppose this is one of many for me.

Thank you all so very much. I will let you know how it plays out.

January 21, 2008 05:09 PM #28
Rainer
18,140
Cathy & Gary Elmore
Coldwell Banker Tomlinson N - Deer Park, WA

Chermie,

I had the same thing happen, there was a bump clause and a financing addendum along with the Addendum contingency on the sale of the buyers home.  After weeks the buyers had no action, with the market the way it is and knowing they were holding up thesellers even though there was a CB many Realtors will not show a home with a contingency.  So they retracted their offer.  The sellers were not happy and neither were the buyers but as it turns out their homes still have not sold and the buyers listing expired and they too are wiating till the market turns.

It seems to really depend on the buyer, seller and communication....and being realistic.

January 21, 2008 06:48 PM #29
Ambassador
895,064
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Realtor - Ann Arbor Real Estate
It depends on the contract. In our area, the buyers can withdraw at anytime until the contingencies are met. Too bad, but understandable.
January 21, 2008 06:51 PM #30
Rainer
184,112
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate
Cherimie (beautiful name!) - In Idaho "Specific Performance" trying to force a defaulting party to perform is difficult to enforce and even more difficult to prove and win.  I don't know what kind of laws you have in S.C. but I would think Specific Performance would be hard to prove and win in any state.  I would have been much better of course if your clients would have left their home on the market but you can't change that at this point.  I hope cool heads prevail and everyone does what is best for everyone involved in the transaction.  I wish you well.
January 21, 2008 07:28 PM #31
Rainmaker
157,943
Jonathan Osman
Keller Williams Realty - Charlotte, NC
Charlotte House Hunter Group

Call a good real estate attorney.  As for my uneducated opinion on the matter, its clear the seller is also desperate for a sale and are going to any lengths to secure one.  However, its not in their best interest to taka contingent offer on a home that's been on the market so long with no offers...that's what I would communicate with the seller. 

As a listing agent, I always enforced a time limit cause on the contingency because I didn't want to miss out on a potental sale or worse yet, a better contingency tied up with a lesser offer. 

January 21, 2008 08:43 PM #32
Rainmaker
652,546
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

Sounds as though some attorney will be making some bucks on this one. Will be interested in checking back and seeing what transpires.

January 21, 2008 09:55 PM #33
Rainer
35,591
Kirk Mulhearn
Prudential California Realty/Gem Mortgage - Long Beach, CA
Prey for a judge, forget a jury trial.
January 21, 2008 11:30 PM #34
Rainer
9,930
Donna Grady
RE/MAX Essential - Wilmington, NC
Bringing Home Results

It is hard to prove Specific Performance cases.  The sellers of the contingent property are just mad at their Realtor for all her/his errors and that BIC is trying to cover up his agent's mishandling of the client.  I agree with the loan contingency.  If your seller's house did not sell, then your new loan would be an investment loan which requires different perimeters for approvals.  If the contingency contract did not specify that the buyers current home had to be listed in the MLS, then the sellers don't have any recourse. 

I am being bullied by a BIC at another real estate agency in town.  Hardly any other agents will do business with that company because of the BIC's reputation.  Long and tall of it, my buyer lost his job one week before closing.  Loan was disapproved.  We did not close based on the loan contingency.  The listing agency claims that he was approved up to a week before closing and therefore everything was in place to close and should have closed.  I provided the lender's letter stating that the loan was no longer approved because the borrower was no longer employed.  Problem is the agent was so new that the BIC was on the phone line with us as we were negotiating the offer.  Problem is the BIC has not read and understood the contingency language on our contracts.  They will not release my client's $1,000 EM.  Nine months later my BIC says to me, stop fighting it.  Tell your client that it will cost him more money to hire an attorney and fight it.  I hate it for my client but at least I know that will not play in their backyard again.  My guess is that you and that agent will have very few dealings in the future.

January 21, 2008 11:35 PM #35
Rainer
185,667
Dick Betts
Dick Betts National Speaker - The Villages, FL
National Speaker, Web Presence Expert
Thank you for sharing your problem.  It's great reading the comments.
January 22, 2008 08:27 AM #36
Anonymous
Anonymous
Jolene Anderson

This is a case for a professional real estate attorney who has represented buyers and sellers in declining markets.

If the information was communicated directly to the Seller and there is a "paper trail", this logically should suffice. However, in declining markets, some Sellers are looking for a quick fix or someone to blame.

Protect yourself and your clients by keeping a documented written paper trail of every conversation and save for future reference.

Good luck!

January 22, 2008 08:56 AM #37
Rainmaker
477,913
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Michigan
 I had to bookmark this because of the interest. I've read thru some of the comments and they're all great ones. this has been happeneing all too often and in this market we will see lots more of it. Say a prayer and keep doing the RIGHT thing.
January 22, 2008 11:32 AM #38
Rainer
122,017
Christy Powers
Keller Williams Coastal Area Partners - Pooler, GA
Pooler, Savannah Real Estate Agent

Wow.....that is a tough one. I have no idea. I would think that since they were unable to sell their home, they should be released. Did you go to the seller's agent before you withdrew and tell them what was going on. It's not like they were backing out because they found something better. I would think this should have been let go.

 

January 22, 2008 12:59 PM #39
Rainmaker
297,323
Ryan Hukill - Edmond
ShowMeOKC Team of Paradigm AdvantEdge - Edmond, OK
Realtor
I don't really have any advice that will help now, but my advice earlier would have been to discuss things with the sellers of the other property before withdrawing the listing.  Most people are reasonable enough to understand that things change, and would likely go along with realeasing the contract, but they likely now feel like they've been played a little.  Communication with all parties of a transaction goes a long way toward keeping everyone reasonable and happy.  Good luck... hope it works out OK for everyone involved.
January 22, 2008 10:29 PM #40
Rainer
201,233
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
Cherimie I know that this is 20/20 hindsight but did they get a release on the purchase before they decided to cease trying to sell their current home?
January 25, 2008 10:09 AM #41
Anonymous
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Rainmaker
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Cherimie Crane

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