Expert: liznarr - 6/9/2008

Question
I have a contract on my NC house (it was a 30 day close from signing) and I
meet all the inspection items in the time frame stated in the contract. Also in
the contract it states that the buyer could walk if they could not get a loan at
6%. While I meet all my legal obligation, the seller wanted me to perform a
service on the house that I am not legally required to according to the
contract. And this service does not impede the value  getting insurance or a mortgage or actual sale of the house. It is just something that they want.  My
realtor instead of explaining this to the buyer agent lead them to believe that
I would do something. The buyer agent when they found out 5 days later that
I would not perform the service said that they were going to use the 6% as
their out, so they could get their deposit back. However in an email from the
buyer agent it stated that the buyer got a loan at 6.25% and would proceed
with the sale if the service was taken care of. I feel like the realtors have set
me up for more cost and left me hanging with this bill and needed to give the
buyer what they want in order to hopefully  close. Is this a common occurrence now that the market is soft?? What should have been done by the
realtors. Could I keep the deposit because I have a email stating that they
would go ahead if the service was performed??

Answer
Hi,

Sounds like you are being held hostage, which is NOT the way this business is supposed to work.

Since I have not seen your Contract, I can only give you general information.  If your Contract has language written in it that the Purchasers “have an out” if they cannot get a 6% loan, then I believe they have that right.  If ever again you have any contingencies in a contract, ALWAYS put a performance/deadline date on the contingency.  That way, you at least know that by a certain date (whatever is agreed on by the Seller and Purchaser) you will have an answer and not be held hostage until the actual closing date.

If the buyer’s agent sent you an email stating that (1) With a loan of 6.25%, and (2) If you perform the service asked for by Purchasers, the Purchasers would go through with the deal, my question to you would be:  How much is this service going to cost you?  

If it’s a matter of several hundred dollars, I would pay for the service and move on.  On the other hand, if it’s a cost to you of several THOUSAND dollars, you should consider if it would be worth paying that amount or starting from scratch again with another purchaser at a future date.

Now, if you can PROVE that your Realtor – without your permission and authorization -- lead the Purchasers (or the Purchasers’ agent) to believe that you would perform this service and pay for it, I would suggest you speak with your Realtor’s Broker-in-Charge and suggest that his/her company pay for this service, as you did not authorize the Realtor to make any such a statement on your behalf.  Do you have any communication from the Purchaser’s agent that your Realtor made this statement?

If … your Realtor cannot produce WRITTEN documentation of your authorization for such; you never made such a statement to your Realtor; and the Realtor took it on his/her own to pass this information on to the Purchaser’s agent; shame on him/her!  When a dispute such as this arises, and lacking WRITTEN proof, I would say that your Realtor acted very improperly.    Let the Broker-in-Charge know that you will file a formal complaint against both the BIC and the Realtor involved if this matter is not resolved quickly.  Remember, however, you need to be able to document your complaint.

As to your question as to whether or not you can keep the deposit because of the email you received, you probably should consult with an attorney to read your Contract and review your other supporting documentation and give you legal advice.  Obviously, if you have not/do not perform the service, you would have no recourse with the Purchasers.

Good luck to you, and write again if you have additional questions.

Regards,
Elizabeth