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My little cousin is purchasing a condo for himself. I am acting as his "adviser" so to speak, since he is new to the area. I gave him advice on neighborhoods, price, and accompanied him to open houses etc. This market is extremely competitive, condos in his price range fly off the market in under ten days with multiple bids.
He decided to make an offer on a condo that he likes. On my advice, he uses a dual agency to beat out the competition. His offer was accepted. An inspection was conducted and found that the shower is possibly leaking into the framing behind the wall. Negotiation on how much credit the seller should give for the repair took place, after many back and forth, the dual agent drafted an addendum with the agreement. My cousin forwarded me the draft and asked for my advice.
The addendum basically says, "Seller and buyer to split the cost of demolition of shower stall and dry rot inspection of the framing behind the shower. Seller pays for everything else related to repair of the shower."
Upon reviewing the agent's draft, I found it to be satisfactory and advised my cousin to sign the addendum and lift the inspection contingency.
My cousin got a contractor to give him a quote of the repair. We forwarded said quote to the agent who then presented to the seller.
Here's where things took an unexpected turn - it turns out the dual agent said he made a typo in the addendum. Instead of "Seller pays for everything else related to repair of the shower." He said he meant to write "Buyer pays for everything else related to repair of the shower."
The addendum has been signed by both seller and buyer (my cousin). And my cousin only moved forward based on the verbage in the addendum. Had we known it was "buyer" who pays for that, we might not have lifted the contingency.
So what to do now? The dual agent just wants to change it back to buyer pays for everything else and move on. But my cousin is feeling like he was feed bad information to move forward. The seller doesn't seem like wants to pay that portion.
Btw, the repair is estimated to be $8,000. The dual agent's commission of this sale is estimated to be around $9,000. I am thinking if the dual agent and the seller can folk up $2,000 each then it can effectively split the repair cost with my cousin. Do you think this is a reasonable offer?
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Btw, the repair is estimated to be $8,000. The dual agent's commission of this sale is estimated to be around $9,000. I am thinking if the dual agent and the seller can folk up $2,000 each then it can effectively split the repair cost with my cousin. Do you think this is a reasonable offer?
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...you realize that pretty much the only reason any agent wants a dual agency situation is to increase their commission. If you think such an agent is just gonna give back that cash...
Are you an attorney? What qualifications do you have to "advise" your cousin?
...you realize that pretty much the only reason any agent wants a dual agency situation is to increase their commission. If you think such an agent is just gonna give back that cash...
If the deal falls apart he gets nothing. Even after giving some money back, he still pockets a nice sum, more than if he had not been a dual agent. That's my line of thinking.
Quote:
Originally Posted by chet everett
Are you an attorney? What qualifications do you have to "advise" your cousin?
I advise him on neighborhoods, demographics, and price. My expertise because I'm an investor.
...the dual agent said he made a typo in the addendum. Instead of "Seller pays for everything else related to repair of the shower." He said he meant to write "Buyer pays for everything else related to repair of the shower."
The addendum has been signed by both seller and buyer (my cousin).
Before anyone responds, it would be helpful to know how the costs break down. You note that buyer/seller agree to split costs for "demolition of shower stall and dry rot inspection of the framing behind the shower". How much of the $8,000 estimate is for that, and how much is for "everything else"?
Seems to me an ethical agent would eat the cost and learn to better proof-read his/her contracts next time.
If seller and buyer agreed to the addendum, it seems the agent has an expensive mistake or an angry seller (or both), but there's no way the buyer should get stuck with it based on your description.
So had the seller planned on paying for everything except the demolition, but, after the 'error' was made, changed his mind and decided 'buyer pay' was a better deal? ... or had the seller believed the buyer would pay from the beginning? (or does the seller have other offers 'waiting in the wings').
The agent may/may not have made an error, but, both you and your cousin missed the change, leaving the leverage on the side of the signed contract (versus 'intentions'). One problem with a dual agency is that the agent bias typically most often favors the seller.
The agent may/may not have made an error, but, both you and your cousin missed the change, leaving the leverage on the side of the signed contract (versus 'intentions'). One problem with a dual agency is that the agent bias typically most often favors the seller.
From what I read and think to understand is that the agent was supposed to put the buyer to pay for everything else. The cousin agreed to typo of the seller paying for everything else and signed it thinking that was the counter offer.
From what I read and think to understand is that the agent was supposed to put the buyer to pay for everything else. The cousin agreed to typo of the seller paying for everything else and signed it thinking that was the counter offer.
Correct, momtothree.
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Good luck with that...
