Expert: Karyn Foley - 1/10/2009

Question
My husband and I have been looking for a lease option home due to our current credit situation.  We hired a company to clean up our credit and represent us in the negotiations of the lease option.  We found a house that offered these terms:  lease for 1 year and obtain financing within that time frame and complete the sale.  The sellers wanted $5,000 down and 1,500/mo on  275K home.  We quickly put a contract and went through negotiations on the property.  We jumped through all of the hoops and had a final signed contract, turned the 5,000 into the title company and received a move in date for next week.  My husband and I thought that it was too soon for the sellers to move, but they set the date in the beginning.  We are now 1 week away from moving and they decided that they do not want to sell their home.  Do we have any legal recourse for this situation?  Our agent tried to get some understanding of why they chosen to back out.  Can they do this eventhough the final papers were complete?

Answer
Dear Lisa:  I had hoped that your agent had suggested you having your own real estate attorney look over all documents.  Even though we real estate agents do handle these types of transactions, the least options and lease purchases are fraught with misunderstandings and possible problems down the line.  I cannot "practice law without a license", and so no ethical agent will tell you what to do and what can be done.  Plus, I do not have a copy of the transaction and know the clauses.  Your own agent should seek advice from their company legal department for their guidance, but it is a conflict of interest for their company attorney to represent you.  I suggest you hire a real estate attorney, at the very least for a review of all paperwork.  You may have recourse and you may not, the attorney will lay it out for you.  Even if you do have recourse, will it be worth your time, effort, and money to go forward?  Or, would it be more practical for you to simply get your money back and go on to the next situation?  Make a wise business decision, not an ego decision.  You may wish to obtain the services of a more experienced agent the next round, one who has the support of a good manager of company who would have helped out gaining some understanding of the issues. If your credit has been remedied, you can always wait and see what the market is doing next year.  To purchase or make a commitment now may be too soon, unless your contract incorporates wiggle room next year if the prices continue to decline.  With good credit and a down payment, you should be in the drivers seat both now and next year.  There are also small independent real estate offices that offer simple legal advice at a more modest cost, and you can seek out an opinion from one of these offices.  They are usually storefront operations on mail streets offering good deals on simple matters.  Please let me know what happens and good luck.  Why not go back to AllExperts and seek an answer from a real estate attorney in your state, rather than a real estate agent?  That would be a smart thing to do as well.  Karyn Foley