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We won a bidding war with an over asking price offer on a house which had been on the market for 12 days.
The sellers agent was acting shady the whole time. After our initial offer, we were told there was another interested buyer and were asked to come back with a “best and final offer” and the sellers would choose between the two. During that time, the other buyer was already allowed to do an inspection before we were even given a chance to come back with another offer. Eventually, our agent muscled in a higher bid which they accepted. We rushed to do the inspection, and the attorneys began to draw up contracts. The inspection didn’t turn up anything serious, and we agreed to fix the little stuff on our own for a $2000 credit at closing. We offered 10% of the down payment at signing and the other 10% at closing. We also offered to pay the difference if the house appraised at asking price (our family has some special needs and there aren’t many houses with a layout that works for us like this one did, hence going the extra mile to get it).
3 days before we were supposed to sign the contracts, our agent gets a message from their agent saying that they were proceeding with the other buyer. No explanation. No chance to come back with a higher bid, or to negotiate anything in the contract.
Basically it seemed as if their agent was trying to steer them to the other buyer from the beginning but we can’t prove that. Both our agent and attorney said that it’s customary in these kind of situations for the seller to reimburse the cost of the inspection for the buyer who wasn't chosen (us). Our attorney has contacted their attorney and our agent has contacted their agent’s boss but so far it seems no one has any intention of giving us our money back after burning us. I’m about to go directly to the seller myself. If they refuse, would I have any grounds to take them to small claims court?
If this was $200 or $300 I’d just let it go but it was $700. Plus it's the principle of the matter. Do I have a leg to stand on here or am I SOL?
You are SOL. My buyer has the inspection and I bailed on them due to a higher offer that was all cash. I sent the that buyer a check for inspection cost. I did it because I’m not a pos, legally I wasn’t obligated.
<sigh> As I expected. I plan on writing the seller a respectful but firm letter. Maybe appeal to the fact that they will be in our shoes when they look for a new house soon. They seem like nice people from what I can tell. I wouldn't be surprised if their agent completely mislead them and they had no idea what went on.
our agent muscled in a higher bid which they accepted.
The purchase contract should have been binding, and have a remedy to you for the seller's cancellation. Also, I'm pretty sure they can't accept and proceed with another offer unless and until the dispute has been settled.
Quote:
the attorneys began to draw up contracts.
Since you had attorneys draw up your contracts, you should contact them to find out what rights you have, and which should also be stated in the contract. I'm curious what state you are in that you had attorneys draw up your contracts.
Quote:
3 days before we were supposed to sign the contracts, our agent gets a message from their agent saying that they were proceeding with the other buyer. No explanation. No chance to come back with a higher bid, or to negotiate anything in the contract.
That appears to be shady dealings on the part of the selling agent / broker. Depending on what state it is in, the broker could be liable for damages, and possibly lose his/her license to do business. Oh, I see it's New York. I'm not familiar with how they do business there so perhaps my comments don't apply but those are the things I'd pursue.
Quote:
Both our agent and attorney said that it’s customary in these kind of situations for the seller to reimburse the cost of the inspection for the buyer who wasn't chosen (us). Our attorney has contacted their attorney and our agent has contacted their agent’s boss but so far it seems no one has any intention of giving us our money back after burning us. I’m about to go directly to the seller myself. If they refuse, would I have any grounds to take them to small claims court?
If this was $200 or $300 I’d just let it go but it was $700. Plus it's the principle of the matter. Do I have a leg to stand on here or am I SOL?
How much did you pay your attorney? Both your attorney and agent / broker should have better answers for you, including your chances in small claims court, going to the selling broker, and possibly the state licensing board. Your evidence would be the binding contract for purchase, and evidence of subsequent cancellation by the seller.
The purchase contract should have been binding, and have a remedy to you for the seller's cancellation. Also, I'm pretty sure they can't accept and proceed with another offer unless and until the dispute has been settled.
Since you had attorneys draw up your contracts, you should contact them to find out what rights you have, and which should also be stated in the contract. I'm curious what state you are in that you had attorneys draw up your contracts.
That appears to be shady dealings on the part of the selling agent / broker. Depending on what state it is in, the broker could be liable for damages, and possibly lose his/her license to do business. Oh, I see it's New York. I'm not familiar with how they do business there so perhaps my comments don't apply but those are the things I'd pursue.
How much did you pay your attorney? Both your attorney and agent / broker should have better answers for you, including your chances in small claims court, going to the selling broker, and possibly the state licensing board. Your evidence would be the binding contract for purchase, and evidence of subsequent cancellation by the seller.
We didn't have a purchase contract at that point. In NY the inspection is typically done before going into contract, as the "who fixes what" issues are negotiated before hand. We did have a signed purchase agreement which is like our offer put in writing, which is considered non-binding, and probably why I'm SOL.
NY requires the involvement of attorneys for these transactions. Our attorney hasn't charged us anything yet.
Nothing matters or counts until contracts are fully executed. Unfortunately this happens often. There should be some changes to the way this plays out. It's always inspection, then contract, and many people do get screwed out of 500 or more bucks on an inspection. Sometimes more than once.
The purchase contract should have been binding, and have a remedy to you for the seller's cancellation. Also, I'm pretty sure they can't accept and proceed with another offer unless and until the dispute has been settled.
Since you had attorneys draw up your contracts, you should contact them to find out what rights you have, and which should also be stated in the contract. I'm curious what state you are in that you had attorneys draw up your contracts.
That appears to be shady dealings on the part of the selling agent / broker. Depending on what state it is in, the broker could be liable for damages, and possibly lose his/her license to do business. Oh, I see it's New York. I'm not familiar with how they do business there so perhaps my comments don't apply but those are the things I'd pursue.
How much did you pay your attorney? Both your attorney and agent / broker should have better answers for you, including your chances in small claims court, going to the selling broker, and possibly the state licensing board. Your evidence would be the binding contract for purchase, and evidence of subsequent cancellation by the seller.
I know that you wanted to be helpful to the OP, but your comments are not relevant.
New York State real estate is conducted in a unique manner that is very, very different from how to purchase real property in California. We always use lawyers to prepare documents, not real estate agents.
I know that you wanted to be helpful to the OP, but your comments are not relevant.
New York State real estate is conducted in a unique manner that is very, very different from how to purchase real property in California. We always use lawyers to prepare documents, not real estate agents.
It’s amazing how different NY is from the rest of the country in that regard. I never understood the logic about a buyer paying for an inspection when they have no recourse if the seller bails.
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"Let this year be over..."
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Unfortunately this is another example of what a convoluted mess the NY Real Estate Process I am sorry for your experience. When we were selling one potential buyer wanted us to pay for their inspection because they had a similar experience to you and didn't want to lose again we said sorry not our responsibility.
Elsewhere in the real world the buyers realtor writes up the MLS Contract with any contingencies such as inspection, financing, time line to close the seller can propose a change to a term that's not acceptable. Once both sides sign it is a binding contract and if the seller tries to switch to another buyer you have the legal grounds to hold them to the contract if you want.
Good Luck
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