Are we still under contract or not? or got scammed? (Austin: real estate, credit)

[austinw2]

Hi RE Gurus!

Please guide me if you can. Thanks!
Situation: In Austin
- I put my house on sale, and buyer made us sign on Saturday Morning to go into the contract, with inspections to be done on same day, Saturday.
- My agent offered to take the possession of the Option fee and EM checks to allow the inspection to happen as Buyer agent was from out of city and cannot be there.
- After inspection, buyer initiated the termination of the contract and said I have put stop payment on the check and I want them back.
- My agent, Seller agent told me she dropped the EM check in title company drop box. I also, had submitted the check in my bank ATM for option fee on Saturday.
- Title company on Monday got the check and at same time the termination of contract from Buyer too. So they say we treat it as contract terminated.
- By Wednesday, I have the check returned from my bank, so Seller did not get the options fee.
- Title company tells me that their finance department says that EM check was returned too.
- My agent, after seeing the termination was of an opinion that the contract is terminated.

Questions:
- Is this some trick, I got scammed into?
- Does the Seller have a right to get the option Money?
- Did we had a contract in the first place?
- If we did not get the options money even, can the Buyer terminate the contract using para 23? Is that legal?
- Is there a chance I can get my option fee at least, for all the hell my family went through?
- If the contract is still active, what can I do?
- Did my agent really did what she should have done?

Feels like cheated.

Please advise.
Thanks!

[centralaustinite]

Not a real estate agent and I'm not 100% sure of the details but it sounds like the contract was terminated properly, even if you are technically owed the option fee monies, might not be worth the wear and tear on your nervous system to get it back.

Next time, push back on the buyer, you chose to sign the contract and let them rush everything, there can be a benefit to both sides to letting things unfold in due time and not trying to force the issue. I'll be interested in what the agents here say.

[TexasHorseLady]

The option fee goes to the seller and the seller gets to keep it if the buyer terminates. If the deal goes through, depending on the contract, either it is credited towards the purchase price or the seller keeps it. The buyer is paying the seller for the privilege of taking the house off the market for the negotiated number of days. If they have not paid the seller the option fee, then there is no option period and they lose their earnest money (the seller gets to keep it) if they terminate.

You need to talk to your agent's broker ASAP. And your agent's broker needs to talk to the buyer's broker (not agent, unless the agent is the broker).

[Lonestarqueen]

When I bought my house the earnest money had to be in the form of a cashiers check. That way there's no way for the buyer to stop payment like there is when using a personal check. Sounds like you probably got screwed. And may need to find a better realtor that knows their stuff.

[Jessaatx]

I don't know who your agent is, but they do not understand how the contract works. The Seller has the right to keep the option check. The whole point of the option check is for the buyer to "buy the option" to cancel a contract within the amount of days specified in the contract (usually within 3-10 days) in case they change their mind....ONLY IF THE SELLER RECEIVES THE OPTION CHECK. Legally, the contract has to be receipted for option. The earnest money is a deposit. The seller can only keep the option if the buyer defaulted in the contract. So, because the title company has not received the earnest & option money check within 3 days, the buyer is in default. Once the buyer does not turn in those checks within 3 days (which is the case here), then you need to contact a real estate attorney, and contact YOUR realtors supervisor (it's on page 9 of your contract). Maybe the supervisor can help you.

[austinw2]

Thanks all for your feedback and advice.

I had asked my agent, what should I do? what option do I have here? her response was, the contract is terminated. "I have checked with the title company and they are saying after they receive the termination from the buyer they will not pursue for EM". I was surprised.

My agent, after consulting with her broker told that title company is not persuasion the EM. The option money is between Buyer and Seller. Buyer should not have put a stop payment but we know he has, now you may want to go to small claims court to resolve the dispute and if you need i will be witness for you.

Then, I said, you are member of ARA, TRA and NRA and more, don't you have some source to get a professional advice? I had to push the point. And this is what we got from TAR.
-----
1- the Buyers and you both signed a contract you both agreed upon- it was receipted at the title company
2-the buyers gave me the Option Fee to give you and the Earnest money to give the Title Co
(he asked me if the buyers made an attempt within 3 days of the contract to get another check for Option Fee to us, I told him no they didn't)
3- his thoughts are that you have a valid contract even though the checks were cancelled by the buyers
4- the attorney suggested you have not been given the amount of the Option Fee so the buyers do not have an option period to terminate
5- he suggests the buyers may be in default of the contract; if they are not intending to buy the house they may be in breach of the contract
6- if that is the case that buyers are in default you and your wife can choose to go to mediation to mediate this (both parties would agree to a mediator) or,
7- you and your wife can choose to go to a court of law to settle the dispute and, if you do, then you need to seek legal counsel
8- he suggested that if both parties were to agree to terminate the contract then you can move on to sell your house and find another buyer; He said it is safer to wait until the dispute is settled before selling the house

It is completely up to you and your family how you want to proceed and whether to engage your own representation.
-------------

After this we gave another chance to Buyer to hand over the option fee, if they don't, Now I am doubting to og ahead with mediation after getting feedback and thinking it through and questioning how was this handled by my agent and her broker. I am fighting for 7xx option fee on a more than half a million house.

[austinw2]

The last line "It is completely up to you and your family how you want to proceed and whether to engage your own representation." is from my agent!

now you know why I have doubt!

[Trainwreck20]

Generally speaking, lesson learned and let it go.

[10scoachrick]

Can't see the benefit to the "buyer" in this case. Sounds like a huge waste of time and energy.

[TexasHorseLady]

Originally Posted by austinw2

The last line "It is completely up to you and your family how you want to proceed and whether to engage your own representation." is from my agent!

now you know why I have doubt!

It is. Legally, your agent cannot make such decisions for you but can only provide you with the information you need to decide how to proceed. You would need to determine if the expense and angst is worth pursuing it; you might want to see if you can get a free or low cost 30 minute consultation with a real estate attorney to determine that. It might cost more to go after the earnest money than it is worth to you after legal expenses. Also, you'd want to see if doing so would tie up the house so that you can't sell it to someone else until it is settled; that would be another question for the attorney, as well.