Expert: Sue Bernstein - 9/25/2006

Question
I live in the state of Ohio.  We viewed a home listed by agent A and was shown to us by Agent B.  We were pre-approved by our lender so were pretty confident going into the process.  We made an offer, put down $500.00 earnest money with Agent B.  Terms included our own inspection at our costs.  Agent B got with Agent A who got with her seller.  Terms were reviewed and written acceptance ensued from the seller.  We met all terms of the contract.  We paid the agreed $400.00 to the lender for application and FHA inspection.  We paid $280.00 for our own inspection.  All deadlines met.  Closing set for 28 days out.  Closing was set for a Monday and on the previous Friday our lender calls us and says "does the seller realize he/she is required to bring approx. $7k to the table to close per the agreement".  I states yes, as when I asked Agent B, is this a good dealy, she stated "absolutely... the seller is even willing to bring $7k to the table to close!"  To make a long story short, lender is approached by another person in same office who happens to be good friends with Agent B and says... "hey, the seller did not know they had to bring that much to the table.  Agent A misread the PA and supplied the seller with a proceeds sheet stating no more than $4k was required.  Just have your buyers take that soft second for the $7k so the deal can be closed".  Our lender said "heck no!  These buyers are not responsible for realtor/seller error.  Bring me a deal I can work with, like, dipping into the commissions to make this deal happen with no additional costs to my buyers!"

So, here we are, Sunday evening, no closing scheduled for tomorrow and both realtors not nearly as active as my lender to get this situation straightened out!  What are the seller's options?  Can he fire his realtor and just sell the house to us?  What is the incentive for the realtors to cut into their commissions?  Help?  If the lawyer card is brought out on our behalf, can the house be tied up until it is settled by the courts?  What about all our expenses plus the fact that we currently rent our home and in 5 days, well, we are moving SOMEWHERE!  Our home is already re-rented!  Any advice would be appreciated!
Christine

Answer
Dear Christine,

I am going to answer this question based on how it would play out if it was in California.
If the seller agreed to the purchase agreement and you met all the terms the seller is obligated to sell you the home or they have serious legal consequences.  The fact that the seller was misinformed by their agent is not your problem.  The seller may have recourse from their agent for incorrect advice and information and it makes sense for the seller to go after the agent for throwing in some money.  Your agent should be representing you and doing whatever necessary for this to close even if it means he/she sharing in the shortfall.  I would expect your agent to be aggressively working something out with the seller and seller's agent to get this to close.  There is only a $3,000 difference between the $7k and the $4k. If necessary, you may need to bring in an attorney to create some urgency.  Let your agent know that if you have to do that she/he may be held liable also.
I hope this helps and good luck.

Sue Bernstein
www.SueBernstein.com