Seller took another offer during legal review (properties, lawyers, inspection)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I still believe the buyer's loan loan officer cost them the home. I would never dream of saying what was said unless I was hiding something. There are ways to reassure a listing agent without revealing personal financial details. I do it every day
The first home I bought was in Massachusetts. They use a two step process there. You write an Offer to Purchase, then you have the inspection, do any additional negotiations and then put everything into a more detailed Purchase and Sale agreement. That is one of the most sensible processes I've seen.
NYC/LI and apparently Chicago are nuts! I know in NY, someone can have a contract, spend about $750 on an inspection and all the while, the seller is showing the house and continuing to take other offers !
So the first step of the process precludes the seller from taking other offers and backing out if they receive a higher offer?
So the first step of the process precludes the seller from taking other offers and backing out if they receive a higher offer?
Yes. Although a more detailed contract is completed later on in the process, the Offer to Purchase is signed by the seller and is a binding agreement. There are standard form agreements, and they will have some boilerplate contingency language as well, including financing and inspection. So the process includes the opportunity for attorney review and a chance to tweak things if needed in the final Purchase and Sale agreement. But it's not the same as in NY where I'm not really quite sure why they even call it a contract, since it seems to have limited to no binding authority on either party!
Is your lawyer an experienced real estate attorney? If so, and if you have a binding, enforceable contract, I'm curious as to why you would delay taking legal action, if that's what you choose to do. Either you have a binding contract, or you don't. (They simply can't "void" a contract unless there is a specific provision in the contract which allows them to do so.)
The crux of the matter is the "legal review" period in your contract. How is that defined...and is it for a narrow purpose or for a general legal review? If, under the terms of your contract, they can back out subsequent to a review of the contract by their attorney, you really have no case. You only have cause to be upset. However, if it's narrowly defined, or if it's not even extended to the Seller, then you may have a case for specific performance.
If you have a binding contract--and if you really want the house and are able to go through with the purchase--then I fail to see any advantage in waiting to take action. If you've moved on and are just looking to make life miserable for the other side...then I think you need to rethink your priorities. Maybe this is a blessing in disguise.
Unless I missed something, the OP has never answered that question.
I've bought and sold a home in NJ, and I sold my elderly parents' house in NJ. NJ is an attorney review state. I have my parents' contract in front of me.
The contract has the MLS logo at the top, with fill-in-the-blank sections, and was signed by both parties.
At the top it states," This is a legally binding contract that will become final within three business days. During this period you may choose to consult an attorney who can review and cancel the contract. See section on attorney review for details."
Then under the Attorney Review section:
"Notice of Disapproval. If an attorney for the Buyer or the Seller [emphasis mine] reviews and disapproves of this contract, the attorney must notify the Broker(s) and the other party named in this contract within the three-day period. Otherwise this contract will be legally binding as written..."
So it's essentially a contract with an escape clause for both the buyer and seller. If the OP's contract was similarly worded, then the sellers had every right to cancel the contract within the attorney review period.
BTW, in the transactions I was involved with in NJ, once the contract is in attorney review, the real estate agents are basically out of the picture. The attorneys change and amend the contract, negotiate inspection issues, extend deadlines, etc. My parents' home sale was simple - the buyers waived inspection (2005, hot market, multiple bids) - yet there were four letters back and forth between the attorneys.
The OP acknowledged that he is guessing that the sellers took a higher offer over the weekend. For all we know, the reason could be illness, death in the family, job loss, and they want to keep the reason private. But if the OP's contract is worded like the NJ contract I have on my desk, it doesn't matter; the sellers' attorney can disapprove of it for any reason whatsoever, including but not limited to receiving a higher offer, and they owe the buyers no explanation.
Unless I missed something, the OP has never answered that question.
Correct. It would have been helpful had the OP posted the relevant legal review period language from their contract. From the information provided in some of the links, however, it sounds like the OP may not have had a binding contract.
On Monday this week their real estate attorney informs us immediately that they do not like the provisions of the contract and are uni-laterally voiding the contract. Their listing agent also contacts our agent and says that he's sorry but his clients (sellers) want him to relist the property. He never relists it. Our "guess" is that he continued to show the property over the weekend, while under contract, and took a higher offer. We've since sent a letter from our real estate attorney that we are under contract and asking to confirm that they have NOT received a higher bid from another buyer. It's been 24 hours with no response.
In Rye Brook, NY during May 1992 my wife and I had an accepted offer at $300,000 on a certain house. When the contract arrived from the seller's lawyer, it contained a clause allowing the seller to draw down the 10% deposit on "buyer's default." My lawyer (and father-in-law) tried to insert a short notice provision so that we as buyers could contest whether or not we were in default. They refused.
We bought a house six units away for the same $300,000. We later learned that the house we originally bid on sold for $320,000.00 We believe the unreasonable provision was in the contract so that we would back away and allow the seller to fetch the higher price. That house had two or three intervening owners since 1992 and recently sold for $620,000.
Here's one for you. I had a contract on a house. The seller aggreed to replace windows so the house would pass FHA appraisal. My loan was clear to close and we were only waiting for the seller to install windows. He dragged it out, the contract expired and he refused to extend. Oh, he had a back up offer higher than mine with no FHA appraisal.
I had sold my current house and became homeless until I got another house. Luckily the seller of the next house was wonderful and let me move my stuff in before closing. At the end of the day, I lost around $2,000 but the house I ended up with is MUCH better.
Attorney review seems to be mostly to review the contract itself, and should have nothing to do with things outside of the contract, such as a buyer or seller simply changing his mind. It would involve addendums as well, as long as they are part of the contract. For example if there was an inspection contingency the attorney will ask that the repairs be made and if the seller refuses, and the buyer won't accept that, the deal is over.
Attorney review seems to be mostly to review the contract itself, and should have nothing to do with things outside of the contract, such as a buyer or seller simply changing his mind. It would involve addendums as well, as long as they are part of the contract. For example if there was an inspection contingency the attorney will ask that the repairs be made and if the seller refuses, and the buyer won't accept that, the deal is over.
Is your lawyer an experienced real estate attorney? If so, and if you have a binding, enforceable contract, I'm curious as to why you would delay taking legal action, if that's what you choose to do. Either you have a binding contract, or you don't. (They simply can't "void" a contract unless there is a specific provision in the contract which allows them to do so.)
The crux of the matter is the "legal review" period in your contract. How is that defined...and is it for a narrow purpose or for a general legal review? If, under the terms of your contract, they can back out subsequent to a review of the contract by their attorney, you really have no case. You only have cause to be upset. However, if it's narrowly defined, or if it's not even extended to the Seller, then you may have a case for specific performance.
If you have a binding contract--and if you really want the house and are able to go through with the purchase--then I fail to see any advantage in waiting to take action. If you've moved on and are just looking to make life miserable for the other side...then I think you need to rethink your priorities. Maybe this is a blessing in disguise.
Our real estate agent and lawyer advised against it saying that it will cost us over $1000 just to file a suit and we would probably lose anyway. They also said they'll just go back to the contract and find something in it they don't like and use that as a reason to get out of it so it was futile effort.
They advised to continue searching for a better house.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
