Expert: Jay Denit - 1/18/2008

Question
QUESTION: I seem to have entered into a bad contract which gives the agent more rights than it does me, especially in the event of default.  This is in regard to acreage in CO.  Is there a way to break the contract or modify it before its expiration date?

ANSWER: Hi Linda,

Which contract are you referring to?  The Buy/Sell contract on a piece of property or the contract you have with your Broker to represent you?

Thanks!

---------- FOLLOW-UP ----------

QUESTION: That wasn't very clear, was it?  Sorry.  The contract is the listing contract with the broker.  Is it correct that he would get half of the earnest money (as stated), but no selling fee in the event of buyer's defaulting?  If so that's what I didn't understand when I asked the question of you.  Also, could you answer whether or not it's legal to word a contract, for financing a portion of the selling price, to guarantee a set amount in interest, no matter when the payoff.  The seller would do the financing, not a financial institution.  Thank you for your help.
Linda


Answer
Hi Linda,

Legally speaking, yes, your agent can retain half of the earnest money that you are due.  I personally don't due it because our business is one of personal referrals, so I feel like it's a little jab to my seller if I were to take that money.

With regards to the seller carry financing, you can write the financing statement any way you like as long as it is agreed to and signed by both parties.  If you are doing private party financing and not having a broker assist you, I would strongly recommend having an attorney draw it up.  It will cost you a few hundred in attorney's fees, but well worth it when you think about the mess that can potentially happen.