Real Estate Sales Contract Conundrum- Must READ!! (Winchester: HOA, house insurance)

[ballplyr83]

Hey Real Estate Pros! I am in the beginning stages of what looks like could turn out to be a nightmare. Let me explain, and hopefully someone can provide me a little advice!

My wife and I recently put a contract on a house in Winchester, which for financial reasons is not going to work out. Throughout this entire process, our agent (buyer's agent) has been telling us we still have a way out of the contract, even though it was a signed sales contract. We continued to pursue an FHA loan, which in the end turned out to be unaffordable, so we closed the case on the FHA loan. Here are the issues we have with the current contract, that we did in fact sign:

- The biggest issue is the date the seller signed the "ratified" contract, was actually 4 days past the offer expiration (offer expiration was 3/26/12 at midnight, but was not signed by the seller until 3/30/12 - after the expiration date). In the "Acceptance" clause it reads after the expiration date: "If not accepted by such time, this offer shall be null and void."

- Our agent made a mistake on the contract, which made the contract contingent on a conventional loan at 3.4% financing. Originally, we had planned on using an FHA loan anyhow, and were looking at 3.5% on that. We closed the FHA loan after we decided we were not going to move forward on the property, and our agent agreed to let the seller know we were no longer interested in the property.

We actually planned on looking at additional houses with our agent because she told us we were not bound to the property, which I believed to be true also because the seller had not signed the ratified contract prior to the expiration date.

About 1 week later my agent sent me a release for the property "to get out of the contract", which I didn't think I was even in.. I signed the release, but another week later the seller is not accepting the release in which I am perplexed.

In hindsight, I believe the seller and my agent may actually have a long standing relationship that dates back a few decades. I know this because when we first toured the house, my agent told me she had bumped into the seller at the grocery store, and he was desperate for some offers on the house. I no longer believe that my agent is working in my best interest, and I am trying to figure out if there is anyway possible, I could be held to a contract that was "ratified" by the seller 4 days past the offer expiration date.

I notified my agent that I was likely looking into legal counsel, because I've already received an email from the seller saying they would resort to legal recourse if we do not move forward on the property.

What tops all of this off, is that the house is currently back on the market even though the seller is claiming we are bound by a contract and will not sign a release. Does anyone else here smell something dirty brewing, or can anyone else point me in the right direction?

[FCNova]

I know message boards can be good places to get info but this situation needs a lawyer's attention ASAP. Good luck

[ballplyr83]

Thank you for the advice. I think you are right, and I will be seeking legal counsel if the agent is unable to resolve the issue with the seller in the next couple of days.

I was wondering if anyone else has ever been in this type of situation, as an agent or as a buyer, and can offer any advice to me as well?

[slowrollem]

I second the suggestion to see a lawyer asap. For info now, I'd suggest posting this info on the Real Estate Forum. You'll find plenty of professionals there with experience.

Best of luck to you.

[bmwguydc]

I agree with the above, and would definitely seek legal counsel in this situation. If you need to find a lawyer, you can get a referral through the Bar Association, or via Martindale-Hubbell. Good luck!

Virginia Bar Association: Virginia Lawyer Referral Service - About VLRS - Virginia State Bar

Martindale-Hubbell: Lawyers Find A Lawyer, Law Firm, Attorney & Legal Services: martindale

[NC211]

I agree on the lawyer thing and you might want to call the VA Real Estate Commission to discuss the realtor behavior here too. http://www.dpor.virginia.gov/dporweb/reb_main.cfm#ConsumerInformation (broken link)

But, to me (I'm not a lawyer) - your first issue is the key to the null and void contract, if the seller dated their signature on a date beyond the expiration of the offer. If that's the case, you really have no "contract", as the seller did not technically accept your offer. Everything else should have no effect. Is the house back on the market as "active" or is it being shown as "contingent"?

I sold my house in NC in 2009. Needed some minor repairs we agreed upon in the contract. We had to move to Chicago before the work could begin. Our realtor led that charge, and sent us the invoices to pay those who did the work "missing shingle here, sanding of the wood floor there, etc..". Buyer was advised to send their own inspector back to the house upon completion of the work to sign off on it. The buyer didnt want to spend the $300. 18 months later, I get a call from our realtor, wanting $5,000 because the owners and their realtor have now decided they didn't like the level of repair work done. A leak had come back on the roof where the shingles were replaced. Caused some water damage to a bedroom wall. Owners said we lied to them and tricked them, and we either pay to fix THEIR house, or they'll sue me. MY realtor, said I should pay them too. Long story short - one call to the NC real estate commission had both realtor licenses suspended, and the owner was advised to read their sales contract, where it said in bold "final execution of this contract releases seller of any and all obligations associated with the property".

[Carlingtonian]

I agree with everyone so far: The "null and void if not signed by XX" clause means it was null and void. But you should contact DPOR and perhaps a lawyer as well. Try DPOR first and see if that gets you your security depsit back, so you can stall on the lawyer option. If you get your earnest money back and threaten the realturd with a lawsuit and making a huge stink with DPOR, they would back down if they're smart.

[snowdenscold]

Originally Posted by NC211

I sold my house in NC in 2009. Needed some minor repairs we agreed upon in the contract. We had to move to Chicago before the work could begin. Our realtor led that charge, and sent us the invoices to pay those who did the work "missing shingle here, sanding of the wood floor there, etc..". Buyer was advised to send their own inspector back to the house upon completion of the work to sign off on it. The buyer didnt want to spend the $300. 18 months later, I get a call from our realtor, wanting $5,000 because the owners and their realtor have now decided they didn't like the level of repair work done. A leak had come back on the roof where the shingles were replaced. Caused some water damage to a bedroom wall. Owners said we lied to them and tricked them, and we either pay to fix THEIR house, or they'll sue me. MY realtor, said I should pay them too. Long story short - one call to the NC real estate commission had both realtor licenses suspended, and the owner was advised to read their sales contract, where it said in bold "final execution of this contract releases seller of any and all obligations associated with the property".

Yeah, that's why buyers get to write contingencies into the contract. If they didn't want to spend a little money to appropriately take advantage of them (i.e. post-repair home-inspection), then boo-hoo. I bet they would want the government to pay when their house burns down but they don't have house insurance, too.

Of course, this assumes people get a quality home inspector, not one who does a half-*** job whose work Mike Holmes would tear to shreds.

[gammann]

Besides the expiration issue, if the contract is actually contingent on a conventional loan, and you can't qualify for one on this property, then I would think that would make it null. Although I'm not sure how it works if you didn't actually apply for a conventional loan. And I'm sure there is a difference between not qualifying and "unaffordable".

Does the home have an HOA? If so, have you received the HOA docs yet? Once you receive them, you have 3 days to back out of the contract if you don't like the rules. No real explanation needed, just say you don't like them.

Above all this, I don't think the seller can force you to buy the home. If you have no legal legitimate way to get out of the contract, you would lose your deposit money. How much earnest money did you put down?

[weezycom]

What they said up above.

Also, the seller has a legal duty to mitigate damages (make sure he takes steps so that any losses he suffers from the contract not going through are minimized)-- and if he finds a different, willing buyer, you should be happy about that, it means you're free and clear of this headache.