Expert: Toni Yates - 9/30/2008

Question
We entered into a Pre-settlement Occupancy Agreement wtih a $10k deposit and $2500/month rent payable to the sellers. The anticipated close date is Jan. 15. The finance contingency was not removed in the agreement. The seller's agent continues to market the property by leaving a sign up. The agreement states it is not a lease, but a temporary right of use not subject to landlord/tenant law. The agreement also states that upon failure to settle the seller can put a lockbox on and show the property at reasonable times. Are we within our rights asking that the sign be taken down and the attempts to market be terminated? Thanks.

Answer
Hi Kathryn-
Thanks for your question. The correct answer may vary depending on what's in your contract and the laws in your jurisdiction but from the facts you gave me, they have an accepted contract with a financing contingency. The MLS system should show that it is indeed under contract but with a contingency(s). Once the contingencies are all met, it is considered under contract. You did not mention whether you have a kickout clause- meaning that if another contract is submitted you have so many days to settle? Are they accepting back-up contracts? It is not uncommon to keep a sign up while there are contingencies. Once all the contingencies are removed, agents generally will put some kind of contract or sale pending sign up. Personally, I wouldn't want my sign sitting out there that long as it might look like I couldn't sell it. It is disconcerting to you as it would seem to indicate a lack of faith but I believe it is within their rights again depending on what's in writing and in the broker's agreement with the seller. Probably not the answer you wanted but hope this helps, Toni