Real Estate/Property/Contract Law - Advice Needed

Discussion in 'Budget Board' started by Mono~rail, Nov 1, 2006.

  1. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    Dh and I have a real estate agent, but I wanted to get some advice from other agents or attorneys who are not involved in our situation before talking to him. I've tried calling my cousin and her dh who are real estate agents, but I haven't been able to reach them so I'm asking here.

    We recently re-located and are in the process of selling our house. The couple who are buying it are related to an attorney who specializes in another area of law - not real estate/property law. They want their relative to do the closing because it is free to them. The signed contract had yesterday (10/31/06) listed as the final closing date.

    Last week, the buyers asked us to extend the closing until mid Nov. We said no because everyday we keep the house it is costing us money.

    Our agent called yesterday afternoon to tell us that the closing did not happen yesterday morning. (We have signed papers giving him power of attorney to handle our end of the closing so we don't have to make a trip back for it. He is not making the power of attorney active until we review the papers and give him the go ahead.) He told us that they were planning to do the closing today, and he asked Dh if we had the papers to review. We did not have the email with the papers attached.

    Around 10PM last night we finally got the email with the papers. The papers were such a mess. Besides incorrect numbers, there were missing figures and addition errors! All of the incorrect numbers were in their favor - go figure!

    Dh is at work this morning straightening out their mess! His boss gave him permission to work on it.

    The mistakes are just so obvious that I am having a hard time believing the mistakes are, well, mistakes. It looks like a stall tactic to me. I don't know why they wanted to extend the closing, but it looks to me like they are making "mistakes" on the papers to stall until the day they want to do the closing. Keep in mind that everyday we keep the house it is costing us money! They are only saving $350 by using their relative, but it is costing us well over that amount!

    At this point what are our options to make them co-operate with the contract?

    Can we say "Obviously, your relative doesn't know how to handle property closings. If you really want the house, we want so-&-so attorney to do the closing. ????????

    Their "free" is costing us $$$$$ !!!!!!!! HELP!!!!!!!!!!!
     
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  3. Tinkerbelle99

    Tinkerbelle99 Mouseketeer

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    From what I understand -

    Your agent, who is selling your house, is supposed to be working for YOU. That means ensuring that closing is smooth and complete. One or two mistakes at closing can happen. we had an error in our paperpwork last year, but it was corrected on the spot and we closed. Several 'mistakes' would send all sorts of red flags up for me. Perhaps these are honest errors, but its unlikely from what you have stated.

    You need to talk to your agent and if you are not satisfied with the explanations, I would talk with your agents broker, ASAP. A real estate agent is working under a broker, that broker is responsible for all agents that work under him/her. Essentially you are the brokers customer and the agent is the middle man (so-to-speak) working out the details.

    The terms of your purchase agreement are binding, please review it and make sure your requirements were properly noted.

    Good luck and I hope it all works out quicky and as painlessly as possible.
     
  4. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    Thanks for the response. We have our agent who we listed with, and the buyers have their own agent. From what I'm understanding, our agent is pretty ticked at the situation. Everyday that goes by without closing is another day postpones his commision check. He has been working his rear end off trying to make the closing happen on time. Short of going to the attorney's office and making them do the paperwork, I don't know what else he could have done.

    We've reviewed the contract and it is binding. It is written that closing was to happen BY Oct. 31st. Another requirement was that the buyers were responsible for closing costs.

    The buyers are saving $350, but it is going to end up costing us much more than that!
     
  5. pilgrimage

    pilgrimage DIS Veteran

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    I would question the ethics of a well-educated lawyer
    making numerous mathematical errors in a relative's
    favor.

    The closing date is part of the offer to buy and is
    binding in our state. Delaying the date can
    mean loss of earnest money or payment of penalty.

    I would certainly make certain that the numbers are corrected.
    If the lawyer seems to be unqualified or unethical,
    look up the bar association in the White Pages.
    Errors happen to us all, however, it seems that this
    person could be dancing on thin ice morally and
    legally. You are suffering financial damage(interest, etc) because of
    their breach of contract (not honoring the agreed to
    closing date).
     
  6. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    Exactly, I understand errors - we are all human. These errors are just really out there, and like I said - ALL are in the buyer's favor. :mad:

    Could we have them repay us the money we are having to spend because of their delays? :confused:
     
  7. pilgrimage

    pilgrimage DIS Veteran

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    Did your agent write the penalty for not closing on
    time? I would certainly invoke it to the letter.
     
  8. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    I don't know. Dh has the contract. I'll ask him to check.
     
  9. Stein

    Stein DIS Veteran

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    It sounds like there are a couple of issues. First, I wouldn't let someone not specialized in real estate handle a transaction worth a couple hundred thousand.

    If you have a few bucks laying around, I would pay for someone to handle it and give them a one-week extension. Your agent should be able to line something up in a day or two. If it falls through, so be, it is much better than dragging out for months or making an error.
     
  10. lisabarr

    lisabarr <font color=blue>Caused an uproar over Tag Fairy v

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    I am a Broker /Owner in Tampa, FL. The thing you need to ask yourselves and your agent is why they couldn't make that closing on the 31st?? I suspect they didn't have their financing straight. I would have your agent talk to the lender directly, not thru the sellers Realtor and find out the actual story.
    Then you need to ask yourselves and your agent "how badly do they want this house?" If the market is slow in your area and buyers hard to come by, you may not want to rock the boat. Just suck it up, and close on the date their financing is in order.
    However, if you have a house that would sell easily and quickly, and the buyers have to have it, you could impose some sort of penalty and make them switch attorneys (we use title companies here, sooooo much easier).
    Using an attorney that doesn't specialize in real estate, is kinda like using a back surgeon for brain surgery. He kinda has an idea, but it's been a while since he had that class.
    I would be a bit ticked at your agent for allowing this closing to happen w/ someone not specialized in real estate law and who does this for a living, no matter what is saved the buyer!
     
  11. pilgrimage

    pilgrimage DIS Veteran

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    Many contracts have a penalty written in
    if closing does not occur on date agreed.
    I don't know what your agent wrote in
    your initial document; however, I would
    not allow this to happen without collecting
    the money their delay is costing you.
    (Each state's laws are different, but their
    lawyer certainly understands the concept of
    "acting in good faith" and "damages as a
    result of breach of contract." Those are
    universal concepts).

    Maybe you could google your state's website
    concerning exchange of property and real estate.

    I am so sorry you are dealing with this.

    Most bar associations certainly frown on lawyers practicing
    a type of law with which they are not up-to-date.
    This discourages a person well-versed in real estate law
    from trying a case in criminal court, and vice versa.
     
  12. Am_I_There_Yet

    Am_I_There_Yet Tells little white lies about Santa<br><font color

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    You have to keep in mind that real estate law varies from state to state. I'm in Texas, and like the OP from Florida mentioned, we use title companies.

    Is there an escrow officer involved? Here, it's escrow officers who submit the HUD, or settlement statement. I typically get one about 24 hours before I have a closing and yes, there are sometimes errors on them that have to be corrected. It's far from out of the ordinary.

    I guess you're implying that the lawyer is the one fouling up the numbers and since we don't deal with lawyers on a routine basis, I don't have any advice as far as that goes.

    What I can tell you, is that your agent needs to not get mad, he/she needs to get results and answers for you. I am on top of my closings and generally turn into the biggest pest until it happens.

    There's far too much riding on this for it be left to work out on its own. Not to mention that fact that your agent doesn't get paid until it closes. He/she should be turning backflips to make it happen!

    I hope it all works out for you! Soon!
     
  13. allison443

    allison443 DIS Veteran

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    Don't you have an attorney? In NY and NJ (the area I am familiar with) I have never heard of a real estate transaction without an attorney on both sides (buyer and seller). Also, as far as I know, the buyers can use whatever attorney they want, even if you think he is not familiar with real estate law.

    Who drew up the contract of sale? I know you said it had a definite closing date of 10/31, but was there any provision put in providing they owe you a certain amount for each day they were late? Or a provision stating that if they do not close on 10/31, they forfeit their down payment? I have seen both of these provisions in real estate contracts. If not, I don't think you can get money from them for the delay. I feel bad because they kind of have you over a barrel-you either have to give them additional time to close, or cancel the contract and put the house back on the market, which sounds like it would be worse for you. I'm sure they are aware you relocated and you want to sell asap. They might be trying to use that to their advantage.
    Keep trying your agent. Like you said, your agent also has an incentive for the deal to go through.
    Good luck, and I hope it resolves quickly!
     
  14. summerrluvv

    summerrluvv <font color=darkorchid>Work Hard. Have Fun.<br><f

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    In real estate, an on or about closing date of 10/31/06 would mean the buyers have until 11/31/06 to close without a penalty incurred. If the contracts say "on or about" they have the right to close mid november.
     
  15. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    It doesn't say "on" or "about". It says "by." The only penalty clause is they loose their deposit and the buying of the house.

    Dh has talked to our agent. We told him that the closing either happens today or not at all. Our agent says we can cut the contract because they have taken too long. At this point all we have done is extend the contract by one day. It expires tonight. Supposedly, the closing is happening today.

    I do not think we will have problems putting the house back on the market. These buyers put in the offer on the 5th day of being on the market. We've had intense interest in the house. It is a nice house in a beautiful neighborhood. Our agent has continued to get multiple calls daily about it.
     
  16. pilgrimage

    pilgrimage DIS Veteran

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    It sounds like you have a very desirable property and if they are not able
    to close today, at least you'll have their earnest money (in our
    state, approximately 5% of bidding price is traditional). I hope you're able to
    close today.
     
  17. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    :thanks: for all the help to you and everyone who has replied!

    It helped for me to be able to talk about it. :goodvibes

    Dh called and he said he talked to the closing attorney. Dh said he thinks they are sincere in their efforts, but they just don't know what they are doing. An attorney who does specialize in real estate/property law is reviewing the paperwork on our behalf - our agent set it up. Dh has carefully scrutinized the papers - heck, he's the one who fixed their errors.

    Dh sent the corrected papers to the closing attorney. The buyer's agent called our agent and said that we were trying to make them pay "our" insurance and he was angry! Our agent had to explain to their agent that the insurance is for the remaining 2 months of this year and next year - insurance is paid for a year in advance. :rolleyes: We know this just from reviewing papers when we have previously bought and sold houses. I would think an agent would know this, too. :crazy:
     
  18. allison443

    allison443 DIS Veteran

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    Glad things seem like they might work out after all!
     
  19. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    I've got my fingers crossed! :goodvibes
     
  20. NCRedding

    NCRedding <font color=navy>I've strayed<br><font color=green

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    Glad it seems to be working out. I have a couple of comments, based upon NC law (which has no bearing in your case, but it is what I know)

    First, in NC, unless the contract specifies "must close by 10/31", and "time is of the essence" then a contract remains valid, and is not affected by the late closing date.

    Second, I don't understand what you mean about the insurance. I've never done a closing where the buyers assumed the hazard insurance for the seller--they are required to obtain their own insurance for one year (from the date of the closing). Then the seller, after the transaction is completed, cancels their homeowners insurance, and gets the premium refunded. Also, while insurance is generally paid for one year in advance, it isn't a calendar year, usually (ie from Jan 1-Dec 31), it is one year from the date of obtaining the home and or policy. For example, we purchased our home 4/19, so our anniversary date of our policy is 4/19.
     
  21. Mono~rail

    Mono~rail <font color=blue>In a pinch, I've been known to re

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    They aren't assuming our insurance. It is the one year advance payment of their own insurance. I'm getting confused here with what you think I meant. :confused:
     

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