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In my state, we don't generally use attorneys for re sales & the "standard" purchase agreement is either cash or financed with a contingency. If you got a "cash" offer here, unless you signed addendum allowing financing contingencies, it would be over.
If you had a financing contingency, the buyer agrees to apply for a loan at a stated rate & term & show you proof within xx days. If you don't get proof, you have a right to re-list, and you should have. And your agent should have told you to.
R.E. Brokers are loathe to keep deposits, but in this case it's justified, as is firing your agent for not looking out for your interests.
I wouldn't hire a lawyer in this case (good money after bad), but I *would* refuse to release the escrow deposit based on the fraudulent docs presented to you & I'd follow the terms of your contract to see if I could take the matter to arbitration. If nothing else, you may be able to delay the return of the deposit & force mr. Specuvestor to get a real job instead of scamming people & wasting other's time.
Long emails from agent-to-agent are frankly horse-**** in a case like this. Both agents got scammed & cost you money because of their negligence & laziness.
I would have a very short & to-the-point conversation with the managing broker (who is supposed to be supervising your agent), strongly suggesting that your "right to sell" contract be tossed so you can hire a grown-up to list your property for sale.
I would read your contract. I know our Oregon ones specifically state that the earnest money belongs to the seller for "financial misrepresentation" by the buyer. This seems to be a clear case of that, and yes, my sellers got the earnest money TWICE when the buyers misrepresented their financial status. I'm hoping your contract has a clause like that.
Yes, you should re-read your contract very carefully. You should also have a good real estate lawyer review it (it doesn't sound like one was involved initially) so that they can provide a letter detailing the reasons why the Buyer should forfeit their earnest money deposit. That letter should be given to the holder of the money held in escrow. At least if you aren't able to keep the deposit you can make it difficult for them to get their money back.
Otherwise your story should serve as a cautionary tale to others: if a cash offer is involved, make sure that any financing contingency is removed from the contract.
Did your agent recommend allowing a financing contingency to be written in a cash offer contract? If so, he's the one at fault here. You bear some blame but if you trusted him and he suggested it, it's on him.
Just to clarify-it was supposed to be a cash offer but when written up it was a finance offer and that is how we signed it. It was contingent on him getting financing with prevailing rate and 30 years fixed. He also had 10 days to give us a loan commitment. We did not get a loan commitment and then he claimed he could not get financing and wants out. However, we have reason to believe he did get financing, but he decided he did not like the terms of the financing and walked away from it. He cannot produce a loan denial letter because he was never denied by anyone.
And also to clarify to the person who says my contract was written by a lawyer, it was not. That is not something that is done around here. The agents are in charge of that.
His agent kept telling us he would pay cash of the financing took to long, which I assume this guy told him. He also provided the POF which turns out are not his funds.
Just to clarify-it was supposed to be a cash offer but when written up it was a finance offer and that is how we signed it. It was contingent on him getting financing with prevailing rate and 30 years fixed. He also had 10 days to give us a loan commitment. We did not get a loan commitment and then he claimed he could not get financing and wants out. However, we have reason to believe he did get financing, but he decided he did not like the terms of the financing and walked away from it. He cannot produce a loan denial letter because he was never denied by anyone.
And also to clarify to the person who says my contract was written by a lawyer, it was not. That is not something that is done around here. The agents are in charge of that.
Assuming this contract was a typical real estate board contract it was indeed created by a committee of attorneys. It likely binds both principals to arbitration in the event of a dispute.
The blah- blah before the contract about it being an all cash offer is meaningless.
Not clear how unemployed guy living in mama's basement would qualify for a mortgage.
In my neck of the woods it becomes seriously problematic to put the property back on the market, let alone accept another offer and close, unless both parties agree to terminate the prior agreement, which means resolving earnest money disputes.
I am in an attorney state where agents attempting to resolve contract disputes between principals is viewed as practicing law without a license. Always interesting how states view situations differently.
Maybe I missed it. What is the value of ernest money in this situation?
His agent kept telling us he would pay cash of the financing took to long, which I assume this guy told him. He also provided the POF which turns out are not his funds.
Just curious. Are the rightful owners of this business aware the buyer portrayed himself as the business owner?
Is there any relationship between the buyer and this business? Where did the buyer get the bank statement from?
Just to clarify-it was supposed to be a cash offer but when written up it was a finance offer and that is how we signed it. It was contingent on him getting financing with prevailing rate and 30 years fixed. He also had 10 days to give us a loan commitment. We did not get a loan commitment and then he claimed he could not get financing and wants out.
I agree with the person who said that you have moved beyond the agent level and, at a minimum, you should talk to your agent's broker about contesting the disposition of the escrow deposit. I strongly suggest, though, that you talk with a local real estate attorney before you take anyone's word for how things should go.
I highlighted the part of your statement because I was curious. You said your contract has a financing contingency and the buyer had 10 days to provide you with a loan commitment. Did he provide written notification within that ten day period that he was unable to get a loan or did the notification come after the 10 day period had expired? The fact that anyone said anything about cash is probably not going to matter much (it depends on your contract) but that 10 day period and the timing of their notice (if any) will probably be key to your attorney's advice.
Last edited by bbronston; 07-08-2016 at 08:09 AM..
[quote=middle-aged mom;44685666]Assuming this contract was a typical real estate board contract it was indeed created by a committee of attorneys. It likely binds both principals to arbitration in the event of a dispute. Fair enough. But the poster I was referring to kept implying that it was MY attorney that drew up the contract. I don't have an attorney.
The blah- blah before the contract about it being an all cash offer is meaningless. Again - fair enough. I am just mentioned it because this whole things was presented to me as he is a millionaire investor.
Not clear how unemployed guy living in mama's basement would qualify for a mortgage. He was trying to get private lending apparently, not a traditional mortgage.
In my neck of the woods it becomes seriously problematic to put the property back on the market, let alone accept another offer and close, unless both parties agree to terminate the prior agreement, which means resolving earnest money disputes. I agree with this.
I am in an attorney state where agents attempting to resolve contract disputes between principals is viewed as practicing law without a license. Always interesting how states view situations differently. We will go to arbitration with this, if needed.
Maybe I missed it. What is the value of ernest money in this situation? $2000
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