“It’s late at night and there is a phone call. Hello, how are you? (I am now thinking to myself OK should I know this friendly voice?).
My response was the usual, ‘Hi, how are you? ’ I had met this lady before through a friend of mine. She sounded worried and I honestly don’t blame her. She began to tell her story of how her daughter and son-in law wanted to move a few counties away. They thought he would have no problems getting a job in this new town. They fell in love with a house, and THE LISTING AGENT wrote up the offer.
Once, the daughter and son-in law saw the written offer prepared by the listing agent, they immediately told her that the offer was a cash offer. They did not have the cash in the bank to purchase this home, and to be able to purchase this home they would have to sell their current home first. The mother indicated to me that the agent’s response was ‘Don’t worry. You have a year to sell your home, that’s plenty of time. ’
Also, the prospective buyers questioned the deposit, $35,000.00 on a $300,000.00 purchase? The listing agent replied that ‘it was the minimum percentage required by her company. ’ They did not have the monies for deposit and thereafter proceeded to get a line of credit on their current home to fulfill the deposit. NOW, IT GETS BETTER and we all know what happens: MARKET CRASHES!
Nine months into this contract and their current home has not sold, the husband has not been able to find a job, and they are paying a line of credit for this deposit. To make matters worse the house value has declined. No financing contingencies, and of course, no appraisal contingencies.
I don’t care what market we are in, what is going on in your life now. You have contingencies and I will list them in that contract. You need to sell your house, you need a mortgage, whatever your needs are to fulfill this contract I will list them. BUT WHAT DO YOU I TELL THIS LADY????
First and foremost, I replied that I am not an attorney. That her daughter and son in-law have a legal obligation under this contract and that they should seek an attorney’s advice. I further replied that, if it was me, I would not sign that ‘Release of Deposit ’ form. I would send an explanation letter to the listing agent’s broker with copy to the real estate commission.
How can these agents sleep at night? Was this representation one-sided or what? I understand that the prospective buyer’s signed that dotted line. But at the time the contract was being signed no one mentioned the fact that they could lose their deposit and even be sued a year later. Let’s go back to basics. We don’t need to rush that quick offer to get it to the listing agent before another contract is signed. Did we forget that it is a ‘legally binding contract ’? Let’s take the time to sit with the buyers and actually explain that contract.”