Expert: John Hendricks - 9/14/2007

Question
Hi John:

I'm so thankful to find this site - we (my fiancée and I) are in the process of purchasing a house in Agodones, New Mexico.  There was another offer on the house but, the other offer was contingent upon those buyers selling their own home.  We offered $285 with no contingencies, except that the house must pass inspection.  The seller came back with a counter of $292 and requested earnest money in the amount of $5000.  We countered again with acceptance of the $292k, but we stated that we were only willing to put down 1% (the standard in NM).  Herein lies the problem:  It has been over two weeks since we have countered the counter offer.  The seller is apparently living in Israel, but has his son (with power of attorney) living in Albuquerque.  Because of the previous offer on the house, we had to give 48 hours to the other party for first right of refusal.  This time has passed several times over, but we still have no word from the seller, his agent or our agent as to the status of our offer.  My fiancée and I are at the end of our collective ropes with these two agents (who just happen to work for the same agency).  What, if anything, can we do?  Our realtor waited over 24 hours before she even submitted our counter offer and I’m afraid that the longer we wait, the better chance the other buyers have of coming up with the money.  Is there anything we can do?  Do we have any legal recourse?  Any advise would be so very much appreciated.  Thanks from both of us.  -   Mike  

Answer
Dear Mike;

Thanks for the question... I am a California agent, but I might be able to offer some suggestions on what to do.
It sound as if you are represented by a Realtor and that is good. I would first ask your agent what your options are... Usually there is a time limit or an expiration date on the counter offer, and the counter to counter offers...I would have your agent refer to the documents for those time frames to answer that question. If there is no response from the Seller within the time frame that is indicated on the counter to counter offer you provided, you are out of time and the offer is considered null & void unless all parties agree to an extension.

Regarding your earnest money deposit, in California, you can put an earnest money deposit of whatever amount you want. Usually it is as little as $1000 or up to 3% of the agreed upon sales price, but it is not in jeopardy until you release all your contingencies. If  there is a contingency in your contract that doesn’t meet to your satisfaction such as inspections or if you have a loan contingency that can’t be met, escrow should be allowed to be cancelled, and deposits should be returned to you, minus any fees the title company may charge, if a title company in New Mexico.  No other fees should be charged by the agents involved in the transaction unless it is noted in the contract.

One other option is to accept the original counter offer as it is presently written even if it is out of contract to see if the seller will bite and accept. You have to remember that the seller is not obligated to honor the original counter due to the time frames stated on the counter offer if there was one. The difference in the deposit is an insignificant amount of money to seal the deal if it is the house of your dreams and would be credited to your down payment if you released your contingencies and complete your purchase.

Lastly, I need to acknowledge that I do not have a copy of your contract. I am a California Realtor who is not familiar with New Mexico law and I highly recommend reviewing your options with your agent at least at this point. If you do not get satisfaction from the agent, your other recourse is to contact the Broker Manager or Broker Owner of the company where they are employed at for further review of the contract and your options. The Broker Owner of the company is ultimately responsible for your representation, not the agent. If you want the home, eliminate your completion, and knock the primary buyer out of their number one position, take whatever recourse you need to, to secure your position, including talking to the Broker Owner/Manager and  demanding a answer and recommendations of what you need to do next.  If you get little or no satisfaction, you may want to consider finding another agent for the job of finding your new dream home… If you eventually end up not getting the satisfaction you need, e-mail me back and I will refer you to an agent who will do the job you would expect from your Realtor. But first, I would encourage you to talk to your agent first.

One more thing, this would be considered dual agency in California, I not sure how they would handle this in New Mexico, but if it is anything like California, there are strict guidelines for this type of representation...Review that with your agent as well…I hope this helps a little, please let me know what happens… JohnHendricks@Marin1.com

Warmest Regards;
John Hendircks