Expert: liznarr - 12/23/2011

Question
We have a contract brought to us by our agent as a dual agent on November 3.  The buyers are known to him as they are his renters.  The property was no longer listed once the contract came in and the realtor allowed them to view the property by themselves knowing we were out of town.

During the contract process, the buyers were having trouble with the loan due to two tax liens.  These had been paid in October but had not yet cleared their credit report.  On December 2nd we were assured that things were progressing and committed to driving from Florida to Missouri to move out things for a December 15th closing.  On December 6th we arrived in Missouri and had an email telling us the deal was iffy, not to liquidate or move just yet.

The loan commitment date of Dec 9 came and the realtor sent a denial letter even though the lender was still in process.  On December 10th, we and the buyers extended the loan commitment date to December 16th.  When extending the realtor told us a second lender had denied them and he was still waiting to hear on the first lender.

On December 16th the realtor sent an email stating the first lender was still considering and attached a denial from the second lender to meet the contract requirements.  This denial was dated December 9th and mailed on December 9th.  When brought to his attention, the realtor sent some further email correspondence where the lender said the denial was on the 16th.  They realtor pointed out the buyers had received the denial on the 15th (via snail mail) and the lender just said it was a typo and they were considering the loan until the 15th.  We still have not heard from the first lender.  I told our realtor that I thought the contract was still in force and loan waived as the second denial was before the effective date.

Our realtor contends the denial terminates the contract and we are not owed any damages for our travel expenses (we suggested only gas and motel for needless trip).

Questions:
Should our realtor have allowed the buyers to spend hours at our property unaccompanied? (We have video cameras and recorded this).

The second denial just sounds bogus.  We still have not received any denial dated after the extension.  Are the buyers in default?  If so, what damages?

Should we take any action against the agent?  Sue for contract, charge with fraud, report him to the firm (large national firm)?

Can we cancel our listing contract and refuse to work with this realtor any more?

We do not feel the buyers are at fault here.  Not sure we trust this agent though.  Any information you can provide is appreciated.

Answer
Hi Glenn,

I apologize for the delay in answering your email.  I was hospitalized unexpectedly and am just now back to answering email.

Your questions are being answered below:

Questions:
Should our realtor have allowed the buyers to spend hours at our property unaccompanied? (We have video cameras and recorded this).

Absolutely not.  This Realtor should never have given access to your property if any prospective buyers were not accompanied by either him or another licensed agent unless he had specific permission from you IN WRITING to allow that to happen.

The second denial just sounds bogus.  We still have not received any denial dated after the extension.  Are the buyers in default?  If so, what damages?  

Your Contract of Sale should have wording in it which determines the answer to this question.  If your Contract was “subject to” loan approval and the buyers were not able to obtain a loan, they probably would not be in default.  

What is not clear to me is after the first “denial,” what does your Contract say about a second loan submission?  Review your Contract carefully.  I would strongly recommend that you obtain legal advice from a reputable attorney in your area.

Should we take any action against the agent?  Sue for contract, charge with fraud, report him to the firm (large national firm)?
If you feel that your agent has not properly represented you, then by all means pursue this matter.  You can begin by putting your dissatisfaction in writing and sending it to your agent’s Broker-in-Charge (BIC), who is responsible for all improper actions and/or inactions of any agents working under his/her direction.  You can always ask the BIC to compensate you for your damages in lieu of your contacting an attorney and possibly bringing an action against both the BIC and the agent for possible Breach of Agency.

If you drove from Florida to Missouri in anticipation of a closing and were assured by your agent that all was in order for a closing, it certainly sounds like you have been wronged.  The burden will be on you, however, to prove this.  Hopefully, you have some email communications documenting what you have written.

Can we cancel our listing contract and refuse to work with this realtor any more?
You can always refuse to work with any Realtor.  You should go through the Broker-in-Charge to properly terminate this listing and receive an unconditional Release of the listing.

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

Regards,
Elizabeth