how to get out of home sales agreement (Penn: mortgage broker, credit report)

[djjonb]

i used a real estate broker to purchase a house that was for sale by owner. the real estate broker collected our down payment of 9600.00. she took over 3 months without finding a lender and had our credit run 29 times. we signed a sales agreement with the home owners. we did not want to use that real estate broker anymore and requested our money back. she is claiming that we breached the contract, claiming she found a lender to finance us. we never saw any documentation to support this. thus far she gave us 5000.00 of our money. What fees will we incur because of signing the sales agreement with the homeowner if we no longer want to purchase their home? If we still want to purchase their home, and a new lender denies us credit, can we get all of our money back?

[pghquest]

Originally Posted by djjonb

i used a real estate broker to purchase a house that was for sale by owner. the real estate broker collected our down payment of 9600.00. she took over 3 months without finding a lender and had our credit run 29 times. we signed a sales agreement with the home owners. we did not want to use that real estate broker anymore and requested our money back. she is claiming that we breached the contract, claiming she found a lender to finance us. we never saw any documentation to support this. thus far she gave us 5000.00 of our money. What fees will we incur because of signing the sales agreement with the homeowner if we no longer want to purchase their home? If we still want to purchase their home, and a new lender denies us credit, can we get all of our money back?

If you used a real estate broker, who has a license through the state of PA.. There are several issues to consider. (off the bat, sounds like the broker might have some serious issues legally here)

1) Did the agent provide you with a sales agreement when you agreed to purchase the property? (its required). That sales agreement will state not only the date that you need to close by, and and will state if you need to have financing in order for the deal to be legal. If you havent signed one.. you had no deal. This agreement will dictate the refund agreement if financing is not obtainable.

2) 90 days out to arrange financing is to long of a time.. usually its 30, meaning that the contract was void months ago.. Full refund would be entitled, if it states that the purchase is contingent upon financing.

3) The fact that the broker has refunded $5000, tells me that the broker has admitted, that your entitled to a refund, which means the balance.

4) What in gods name, gives a real estate broker to pull credit? Are they acting as a real estate broker, and a mortgage broker at the same time?

5) Was the property listed with a broker, or did you aproach the broker to aproach the seller about buying it?

6) As for what fees your liable for, this would depend upon your sales agreement, if its contingent upon financing, and you could not get financing, then your usually not liable for a dime. This is a document that you HAVE to sign, so if you havent signed one.. you never had a sales agreement to begin with.

7) Since sellers usually pay brokers fees, if you negotiate the property outside of the broker, the broker might be able, depending on the answers above, to sue the seller for their commisssion.

8) I would question the need to get credit ran 29 times.. Thats outrageous.. The broker here might be liable for helping to lower a credit score because each time its ran.. its a hit on the credit report.

In order to suggest where to go next, I would need to know if you have copies of sales agreements, any commission agreements, contingenies, the legally required property disclosure papers etc.

Take this forum posting as advise.. from a non lawer.. your always advised to call a lawyer for issues like this but off the bat, it sounds like there is several avenues for legal recourse, including filing a complaint against the brokers real estate license..

[djjonb]

Thanks for the info. The Sales Contract states that 1. 1000.00 as initial deposit 2. said that 9000.00 would be due but it left the due date blank, as if it is infinite. one other thing, the price of the house changed and the change was much higher than what was on the sales agreement.

[pghquest]

Originally Posted by djjonb

Thanks for the info. The Sales Contract states that 1. 1000.00 as initial deposit 2. said that 9000.00 would be due but it left the due date blank, as if it is infinite. one other thing, the price of the house changed and the change was much higher than what was on the sales agreement.

Where did the price of the house change?
You cant have an infinite due date on a property deal. Is the date signed anywhere on the contract?

[Tallysmom]

Originally Posted by djjonb

Thanks for the info. The Sales Contract states that 1. 1000.00 as initial deposit 2. said that 9000.00 would be due but it left the due date blank, as if it is infinite. one other thing, the price of the house changed and the change was much higher than what was on the sales agreement.

Get a lawyer. When I took contract law years ago (such a fun elective!) the one thing I remember is that real estate is the ONE place you have to dot your i's and cross your t's... and your contract sounds badly written.

The fact that she gave back just enough money for this not to be grand theft suggest scam or rip - off. Just getting a lawyer to read the contract and write a letter to her might get your money back, and allow you to finish the sale of the house at the contracted price.

So while I understand not wanting to throw good money after bad, a good lawyer might get you what you want..

[PIT]

Consult an attorney and contact the Pennsylvania Real Estate Commission. The actions of your Real Estate broker sound unreasonable and therefore illegal.

[TRO Z]

Check your sales contract, if the option for arbitration was selected...Shoot me a PM, I will give you a couple options on how to walk away and get your cash back...Worst case, it costs you a grand up front, for the attorney...

But if you decide to go through with the hearing, you can recover all costs--My question is, why weren't those funds made payable to an escrow company anyhow...Dumb Move, now you have a legal battle..

[djjonb]

there was no date on the sales agreement at all. i thought that was strange too and the price of the house went up after it was appraised. i have asked the broker for all our money back less the appraisal fee and the cost of the credit checks. still waiting to hear from her though. i believe she is stalling.

[pghquest]

Originally Posted by djjonb

there was no date on the sales agreement at all. i thought that was strange too and the price of the house went up after it was appraised. i have asked the broker for all our money back less the appraisal fee and the cost of the credit checks. still waiting to hear from her though. i believe she is stalling.

The price of a home cant go up after it was appraised, thats the whole idea of a sales contract.

[djjonb]

it was appraised after the sales agreement was made up. I found out later the real estate broker had us sign the sales agreement in order to get the present owner to wait on us to get the down payment funds.