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Let me start out by saying that I know that per REC, the firm representing the buyer may be entitled to their split of the commission to be paid by the listing firm (not the would-be seller)....should a seller breach contract.
My question is....does this ever actually happen when such a situation (seller breach with no extenuating circumstances) arises.
Without going into too much detail right now....I'll say that I am very close (with almost a near certainty actually) to having the sellers breach contract via delay of closing past the 14 day grace period. I am representing the buyers.
To preemptively answer the question I know everyone will ask...YES...my BIC is very aware and now very involved in this situation. She initially warned the listing firm that should their client not close (they really don't have a good reason to not close) and breach the contract; my firm will expect our commission to be paid by the listing firm.
Other agents in my office and on my team think she was just playing hardball to get the firm to push their client to close (my client has already incurred A LOT of costs in this contract; including terminating their lease and then having to renew it at a very high daily rate because of the initial delay of closing)...and that going after a (much smaller) firm for our part of the commission would be bad PR.
I obviously wouldn't mind getting paid for the work I've done trying to keep this transaction together so far... But I also see validity in the "bad mojo" argument so I wonder what others' experiences or observations have been?
Top priority is a happy client (my clients are planning to sue the heck out of the seller if they breach; but that's besides the point of this inquiry). In anticipation of this breach we're going to look at TEN houses this weekend. They're expecting their first baby in September and want a house to bring him home to. I'm going to make that happen one way or the other!
Last edited by TarHeelNick; 07-27-2018 at 07:38 PM..
Our philosophy is if it doesn't close no one gets paid.
Your company going to sue them for the money? I doubt it.
Your Buyer could threaten the Seller if they don't close but that would probably go nowhere.
You just have to go find your Buyer another house.
Our philosophy is if it doesn't close no one gets paid.
Your company going to sue them for the money? I doubt it.
Your Buyer could threaten the Seller if they don't close but that would probably go nowhere.
You just have to go find your Buyer another house.
I had a seller ("hell hath no fury . . .") who was completely prepared to sue for breach of contract when a buyer tried to terminate the day before closing on an as-in sale. Luckily, seller had a hard-nosed attorney who was a friend of the family, so I came out swinging. Buyer was "prepared" to give up earnest money, but they were suddenly faced with the high probability to losing a breach-of-contract case and having to pay damages, commissions, attorney and court costs AND lose earnest money and depleting all the assets they had set aside to purchase the house - thus insuring that they would not even be able to buy another house for a while.
They closed.
No way was I going to roll over and play dead for my seller. The seller had been more than accommodating with a string of demands and a delay in closing because the buyer had switched lenders without notifying us. And then to pull a stunt like that 23 hours before closing. I don't think so.
I was in this situation. I had the buyer. We showed up to closing and signed. The sellers showed up and walked out. I kept telling the listing agent that we would go after the commission so the seller needed to sign. My broker was also on my side saying they would stand up for me and go after the commission as well...
When it came down to it, my broker would NOT go after the commission. They said it would cause a mess with reputation blah blah B.S. crap. The sellers did pay my buyers a small amount to move on and not sue. I could not file arbitration because (the the Code of Ethics) a hearing panel can only award money from a party that received money, and the listing brokerage never received money.
Let me start out by saying that I know that per REC, the firm representing the buyer may be entitled to their split of the commission to be paid by the listing firm (not the would-be seller)....should a seller breach contract.
My question is....does this ever actually happen when such a situation (seller breach with no extenuating circumstances) arises.
Without going into too much detail right now....I'll say that I am very close (with almost a near certainty actually) to having the sellers breach contract via delay of closing past the 14 day grace period. I am representing the buyers.
To preemptively answer the question I know everyone will ask...YES...my BIC is very aware and now very involved in this situation. She initially warned the listing firm that should their client not close (they really don't have a good reason to not close) and breach the contract; my firm will expect our commission to be paid by the listing firm.
Other agents in my office and on my team think she was just playing hardball to get the firm to push their client to close (my client has already incurred A LOT of costs in this contract; including terminating their lease and then having to renew it at a very high daily rate because of the initial delay of closing)...and that going after a (much smaller) firm for our part of the commission would be bad PR.
I obviously wouldn't mind getting paid for the work I've done trying to keep this transaction together so far... But I also see validity in the "bad mojo" argument so I wonder what others' experiences or observations have been?
Top priority is a happy client (my clients are planning to sue the heck out of the seller if they breach; but that's besides the point of this inquiry). In anticipation of this breach we're going to look at TEN houses this weekend. They're expecting their first baby in September and want a house to bring him home to. I'm going to make that happen one way or the other!
talk to your closing attorney that you or your Buyer selected.
It's certainly NOT like the other firm, regardless of size, is going to willingly cut a check from their account to the Buyer side just because their party defaulted.
And I'm not even sure that BA's "earn" the compensation when the Seller defaults. Which document, and which clause are you looking at? You must be thinking the BA would have a claim to charge their Buyer the fee, and then the Buyer would add that as an expense the Seller would be forced to reimburse them for.
It's a shame Sellers don't also put up Earnest money. Think about it.
I've always heard in Homestead states, you can't force someone to sell their Homestead. Not sure the Buyer ever would spend the $ to try and collect damages.
It's a shame Sellers don't also put up Earnest money. Think about it.
I've always heard in Homestead states, you can't force someone to sell their Homestead. Not sure the Buyer ever would spend the $ to try and collect damages.
In NC, the Sellers have put up a property. Usually, that would be worth many times more than any common EMD.
"Specific Performance" is a very real concept, and a logical alternative for the OP's clients to explore with a good real estate litigating attorney.
why should it be sitting there? The Seller knows and acknowledges that they didn't close within 14 days. You announced to them in writing that they were in breach. Are they disputing their breach somehow?
Now, getting all of your inspection costs, due diligence fee, etc - there's your "legal" fight.
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