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RP: Legal Advice Please-new home purchase (long)

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KBerly

Brilliant_Rock
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Apr 21, 2004
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999
Hi guys, I posted this in Family, Home and Health, but thought we might try here too. Thank you!

My DH and I need some legal advice please. We found a home that we looked at, made an offer and the builder accepted the next day. We signed the contract with the closing date and gave our earnest money. Builder then came back, accepted our offer with a two week earlier closing date. In order for us to move forward with the contract, we had to initial by the new closing date on the contract. The real estate agent (acting as a dual agent) mentioned to DH to go ahead and sign the contract for an earlier closing date per the builder, that way the agent would not be able to show the property to anyone else due to it being under contract (the agent himself told us this). We''re happy, blah blah, this was last Sunday.
On Thursday am, which is still during the 5 day attorney review, the real agent called and said there was a problem. Another couple who had looked at the property 3 weeks before had come back into the picture stating that the house was theirs. They supposedly left the country and that''s why they didn''t receive the letters or phone calls. They had signed a contract, but never came in with the earnest money. The builder and agent tried for 2 weeks to get a hold of this couple and could not. They assumed it was "abandoned" and started showing the property again. The couple has threatened to sue the builder if they did not sell them the house. Now, DH and I put the earnest money down with the offer on Sunday. This couple gave no money, only signed the contract. This past Wed. is when they finally brought their money in, 4 days after we signed and gave our money.
So anyway, now we are just basically waiting and hoping this couple can not get financing/loan before next Friday, the 25th, the date of close on their contract. There were a couple of statements made by the agent on Sunday when the contract was signed to us such as, "I would sign this contract now with the builders new closing date. Once there is a contract in place, I can stop showing the property." Our thoughts by making this statement, he is telling us directly and reenforcing the point that there are no PRIOR contracts in place. If there were a contract in place, they should have not been showing the property.
So our question is, is there any legal action that we can take? Our lawyer has sent a letter stating that we are going to extend our offer until Friday, just in case they cannot close on that day as stated in their contract. Anything we can do? Any advice?? This is our dream home, but if it isn''t meant to be, we will move on of course, we just feel like we are getting bullied too by this other couple who popped back in.
Thank you guys in advance!!
Kim
 

KBerly

Brilliant_Rock
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Apr 21, 2004
Messages
999
I don''t know why it came up anonymous....strange. You can see who I am in the other post
 

Dee*Jay

Super_Ideal_Rock
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Mar 26, 2006
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Three parts to a contract: Offer, acceptance, consideration. The consideration in a real estate contract being the earnest money. Without that there is no contract. You presented earnest $, the other party did not.

Let me disclaim the rest of what I'm about to say by stating that I am a real estate agent in the state of Illinois and my comments are intended only to be helpful becuase I feel for you, but I am not offering any legal advice in any jurisdiction, including Illinois. Period.

OK, here goes:

One of the biggest mistakes I see is when a new home buyer allows the seller's agent to become a dual agent. That agent's first loyalty is first and foremost to the seller. So that is a problem to begin with becuase you are not getting the zeaolous advocacy of your own champion in this contract. It is probably far too late to bring your own agent into this contract beacause it probably states that you are purchasing the contract with the assistance of "X* (insert dual agent's name here) and no one else.

Second, about not showing the property once a contract has been accepted. That is simply not true, from a legal standpoint in the State of Illinois. An agent has an obligation to show a property and to present all offers to a seller until the point of closing. That means that a seller could accept another contract once he has already accepted a previous contract, right up until the time $ changes hands at the closing table. Honestly, do agents continue to show a property once it is SOLIDLY under contract--generally NO. What happens is you call an agent and say, "Hi, I'd like to arrange a showing at 123 Main Street on Monday at 4:00 pm." And the other agent will say, "Oh. Well... we have a *contract* on that property." You can tell from the tone in the other agent's voice whether it is a solid contract or one where it may or may not ever come to fruition. Or the other agent may say, "Well, we've accepted an offer on that property... but... " And then you know they don't have 100% confidence it will get to the closing table. And then a back-up showing is arranged. Earnest $ that never materializes would certainly fall into that category, so they would very well continue to show the property. (Note that the agent has never said they won't show the property in either case, only that there is a contract.)

As for suing the builder... There is this legal construct called "specific performance." (Applied only in real estate and marriage--go figure.) The concept being that no one piece of real estate is EXACTLY the same as any other piece of real estate, therefore one could sue for that SPECIFIC property. As an example, even in a housing division with dozens of the same houses over and over and over again they will never be *exactly* the same. One will have a slightly larger lot; one will have a better/different view; one will have a more mature oak tree in the back yard than the other. You get the picture. The courts have upheld this construct, and they may even do so in this case. (I even recall a time when a co4ut--I think it was in Pennsylvania--upheld specific performance in a marriage contract as the bride was like no other woman in the world--but that is a topic for another thread.)

Anyway, my advice if you were my client/friend: Move on. There is no winning this battle. Even it you do somehow prevail (whatever that means in this scenario) you will have a bitter taste in your mouth about the whole thing. There are always more fish in the ocean and even though you are upset right now I would have to tell you to give it a few weeks rest and then hit the trail again. It is possible, BTW, that the other deal might fall through anyway giving you the opportunity to step in, and then you will have to ponder whether to go through with it all over again. (A nice Bourdeaux and a fat steak may make the decision making process a little easier.)

(ETA: Forgot to mention attorney review. A successful conclusion to the attorney review process is a contingent factor in the process. Without that there is no completed contract. So, even if you have offer, acceptance, consideration but attorney review never gets completed the contract is null and void. This protects both parties because there are more factors to agree on than that what's contained in the four corners of the contract document, but getting through it can be a PITA.)

If you have any more questions I will do my best to answer them. But again, I'm only speaking from a general standpoint based on what I know from my own experience an in my own state.

At the very least, keep us posted!

P.S. - Sorry for the very long post but I was trying to address your questions and I seem to have gotten a bit out of control, LOL!
 

dani13

Ideal_Rock
Joined
Nov 12, 2004
Messages
6,183
Kim,

Sorry you are going through this..I am not an attorney or agent with legal advice, but I just wanted to chime in and share my experience with you. My FI and I got caught up in a legal mess last summer over a condo that we put a bid on...the condo failed its inspection re: its central air system., We had an expert come in and verfiy that it was going to cost 5K to replace the system, which the seller failed to acknowledge. He said there was nothing wrong. But both my inspector and the independent air conditioning person verified it. Anyway, we decided to pull out of the contract, and by then our 1st deposit of 10K went through to the seller. The seller and his attorney REFUSED to give us back our money and let us out of the contract. My attorney was incompetent, and could not get me out of the situation. The seller held our money in escrow for 4 MONTHS!!! We were unable to buy anything else, there were COUNTLESS emails, faxes, etc from the other attorney/seller that were harassing in nature, all with the intent of getting us to agree to give him some money in order to be let out of the contract- can you believe that!!! I even had another attorney consult on the case, it was such a big mess. In the end, we ended up settling on 2k to get our money back and be let out of the contract. It was such a mess, because the seller legitimately felt there was nothing wrong, and that he was entitled to some of that intial deposit money because he was "inconvienenced" by us pulling out. And on our side, we were stuck between a rock and a hard place, having a young, inexperienced attorney, and realizing that if we wanted to counter-sue the seller, it was going to cost us 1-2k just to file a suit and walk through the court doors.

In the end, even though it burned me so bad to hand that creep any of my hard earned money, I knew it was the cheapest option. Everyone involved in our case said they had never seen a seller who behaved like this- such a mean person. I could never imagine doing that to someone, you know? After we settled that s***, we found a place with a great seller, and everything went so smoothly, I couldnt have asked for a nicer person to work with- thank God!

So, my advice to you is- BE CAREFUL. Real estate stuff can get really nasty. If I were you, I would probably pull out. I hate to say it, but I learned so much from our fiasco, it was a horrible, torturous 4 months. I just would never get mixed up with shady situations again if I could help it. Keep in mind that taking legal action on your part will cost you a lot of $$ too- just hate to see you be stressed out when there are a million places and nice people out there that there will be no problems with..
Good luck, and keep us posted!!!

ps sorry so long!
 

Dee*Jay

Super_Ideal_Rock
Premium
Joined
Mar 26, 2006
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13,159
Dani - At the point where an agreement could not be reached over the inspection items the contract (almost certainly) became null and void. You should have received all of your earnst $ back promptly. End of story.

I do see this with unfortunate frequency... the attorney either doesn''t know what he/she is doing (this happens often when someone has a "friend" to really practices _______ type of law, but hey, they''ll do this for me really cheap. It''s only a real estate closing--how hard can it be, right?) or when a point of contention arises and the lawyer does not take a FIRM, IMMEDIATE, and if necessary AGGRESSIVE stance on behalf the client. Or, in your case the inexperience of the attorney worked very much against you. (Who knows, in a few years he might be a fabulous real estate lawyer, but you just caught him too early in his career.)

Anyway, I digress. I am so very sorry that you went through this, but it sounds like you ended up with a good place and ultimately a satisfying home buying outcome.
 

dani13

Ideal_Rock
Joined
Nov 12, 2004
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6,183
Date: 8/20/2006 11:00:02 AM
Author: Dee*Jay
Dani - At the point where an agreement could not be reached over the inspection items the contract (almost certainly) became null and void. You should have received all of your earnst $ back promptly. End of story.

I do see this with unfortunate frequency... the attorney either doesn''t know what he/she is doing (this happens often when someone has a ''friend'' to really practices _______ type of law, but hey, they''ll do this for me really cheap. It''s only a real estate closing--how hard can it be, right?) or when a point of contention arises and the lawyer does not take a FIRM, IMMEDIATE, and if necessary AGGRESSIVE stance on behalf the client. Or, in your case the inexperience of the attorney worked very much against you. (Who knows, in a few years he might be a fabulous real estate lawyer, but you just caught him too early in his career.)

Anyway, I digress. I am so very sorry that you went through this, but it sounds like you ended up with a good place and ultimately a satisfying home buying outcome.
I know DeeJay, the whole situation sucked all the way around. I am not one to say something like this, I am somewhat of a feminist, but I really think that a lot of the problem besides being inexperienced, was the fact that my attorney was a young FEMALE. She was up against a older male attorney who knew his ****, and how to work it, and he bullied her so badly it was horrible. And believe me, she was not a friend, she was a real estate attorney who came highly recommended. But it just so happenned that she came recommended from a friend who was a r.e. agent that had nothing but smooth closings and dealings with her. She was good for that, but when the **** really hit the fan she had no clue what to do. She was the sweetest thing, and part of me kind of felt sorry for her...

The whole situation was horrible, and for my first real estate experience, it sucked really bad and put a bad taste in my mouth. I cannot stress the importance of having someone strong and competent in your corner. Laws are laws, and contracts are contracts, so I thought, but how someone interprets a contract is a totally different story. That is why you really need someone who knows what they are doing. I ended up losing over 4K in that whole transaction, including the payoff, the atty fees, etc. But in the end we got a great place, and no need to dwell on it. What was done was done. I really just learned that real estate can be a dirty business, that''s for sure!
 

WTNLVR

Brilliant_Rock
Joined
Jan 30, 2005
Messages
623
I am certainly no lawyer, but when I was selling my house there was a time constraint on the bid and if they didn't respond, tough luck. As long as the realtor has proof the original offer was received and they did not respond in the time frame, they are out of luck. Alot of people threaten legal action when they know they have no case, just to bully people into doing what they want. Get another lawyer, more experienced in real estate. I had a kick ass lawyer and he was great- even though we only had minor issues with the builder- he really looked out for us.Good luck.

And by the way, if you were in serious negotiations re: real estate, wouldn't you leave an e-mail, check your mssgs daily,etc... even if out of the country? I know I would!.
 
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