sellers renegeing on offer

[skeeterfoot]

When an offer is accepted and before closing do you see sometimes sellers renegeing on offer and reselling at a higher price their contract? I am new to this.

 

[disneynutz]

You are dealing with people and people do all kinds of stuff. What's your broker say?

Bill

 

[Minniesgal]

The closing agent told me that the sellers can pull out up until the sale has closed. I asked because it took them 6 weeks to return paperwork. It is very rare as there are costs involved but it does happen.

 

[DougEMG]

Yes it has happened to me twice with different sellers. Best to just forget about it and move on.

 

[drusba]

Before the contract for sale is signed by both parties, the seller is free to reject one offer and accept another when more than one is made. Once both buyer and seller actually sign the contract for sale, both are obligated to complete the sale absent a valid legal reason to terminate the sale, which reasons could include such things as the buyer not being able to get a needed loan or the interest being transferred is different from that which was represented for the contract, such as the seller actually has fewer points than claimed. The seller's desire not to sell to you because he finds someone who will pay more is not a valid legal reason to terminate the already signed contract. If the seller does that, you could claim breach and and sue if desired, possibly ro compel the seller to go through with the sale. However, the reality is why would you want to go through the headache and cost of suing over a DVC timeshare when it is much easier and less costly to just walk away, get your deposit back, and go buy another contract.

 

[Splashboat]

Yes it has happened to me twice with different sellers. Best to just forget about it and move on.

Did this happen after you signed paperwork? I am currently waiting to close - deadline is Monday and I send back my paperwork 3 weeks ago - waiting for sellers. I was concerned so I inquired last week. The Title company said they can't back out because it would be a breach of contract and the TTS person I am working with said she never heard of this happening in all the time she has been there.

 

[CarolMN]

Did this happen after you signed paperwork? I am currently waiting to close - deadline is Monday and I send back my paperwork 3 weeks ago - waiting for sellers. I was concerned so I inquired last week. The Title company said they can't back out because it would be a breach of contract and the TTS person I am working with said she never heard of this happening in all the time she has been there.

If they back out, they will still have to pay the brokers' commission. You get all of your money back.

Even though you could sue for breach of contract, it's not cost effective to do so.

Hope the sellers hold up their end of the bargain, and you close quickly.

 

[Minniesgal]

It isn't unheard of but probably very rare and for bigger reasons than just getting a better price.

 

[DougEMG]

Did this happen after you signed paperwork? I am currently waiting to close - deadline is Monday and I send back my paperwork 3 weeks ago - waiting for sellers. I was concerned so I inquired last week. The Title company said they can't back out because it would be a breach of contract and the TTS person I am working with said she never heard of this happening in all the time she has been there.

I had sent in the signed paper work and paid the deposit, I don't know if the seller had signed their paperwork or not. While I think technically the verbal agreement is binding on them, it isn't really worth the effort to enforce it.

 

[DougEMG]

If they back out, they will still have to pay the brokers' commission.

When it happened to me I asked the broker about if they would still get their commission and they said no. They had said that while technically they were entitled to it, it was just easier for them to sell the contract to someone else and get the commission at that point. Basically it isn't worth the bother to go after a someone who changes their mind even for the listing agent.

 

[lovin'fl]

Happened to me 8 days into ROFR. This was at the beginning of this year. 88 point HH contract with Fidelity that got cancelled 8 days after it was sent to ROFR. We got our money back and moved on. It wasn't for a better price...I suspect it was to book one last vacation (saw an 88 point HH contract- same UY- listed with another broker about 2 weeks after our contract got cancelled...less a bunch of points and with a note saying they couldn't close until 8/13).

 

[dbs1228]

When it happened to me I asked the broker about if they would still get their commission and they said no. They had said that while technically they were entitled to it, it was just easier for them to sell the contract to someone else and get the commission at that point. Basically it isn't worth the bother to go after a someone who changes their mind even for the listing agent.

This happened to me after offering full price seller upped the price - broker told me technically yes they could push but it would not do any good - sellers would be obligated to pay the commission but basically they would probably never be able to collect it!

Another broker told me that they never put it in a contract that the seller is obligated to pay the commission even if the contract is sold because it was nearly impossible to collect on it so they do not even have it in their listing agreement!

 

[JimMIA]

I doubt if sellers reneging because they want more money is the main reason for them backing out. A much more likely cause of backing out is the seller realizing they CAN'T close because they are underwater in their loan and will have to pay IN to close.

We've seen that quite a few times with Fidelity sales because they apparently don't do much due diligence on their listings It's not until they send the "good faith estimate" of the closing numbers that the seller sees the full picture.

That's really an easy-to-prevent unforced error by both the seller and broker, but it happens more often than most people think.