When's a Real Estate Deal a Real Deal?

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
http://actvra.in/589b

 

When's a Real Estate Deal a Real Deal?

 

When does a real estate deal become a real deal?  

At what point can a buyer rightly assume that they have entered into a secured transaction to buy?

  • Is it when the offer is accepted?
  • When a formal Contract is signed?
  • The "Process" of its financing is in motion?
  • Appointments for Inspections or Appraisals are made?
  • Some other "step" in the Process?

Recently, a pre-approved buyer I was working with, made an offer to buy a home they had fallen in love with.  After negotiation, they and the Seller(s) signed a formal Contract. 

Within 2 days of the signing, an appointment for a Home Inspection (per the terms of the signed Contract) had already been made.  My buyers felt they were on their way to becoming homeowners.   

Over the following weekend, the Sellers hosted an Open House at the property involved in the signed Contract.  They received another offer on the home.  One with different buyers and "more favorable terms".


The Sellers canceled their Contract with my clients.  They could do so as the Contract was still in the "Attorney Review Period" allowed by our local MLS Contract.  

This Attorney Review Period stipulates:  Attorneys (on both buyer and seller side) be allowed time to review, approve, disapprove, propose modifications  (except for price), and propose changes to a signed Contract.  

As the original Contract between my buyers and the Seller(s) did not include Closing Cost concessions or a Contingency Clause, the "more favorable terms" must have been one of the following:

 

  • A Closing Date more beneficial to the Seller(s)
  • The Waiving of an Inspection
  • The Acceptance of an "As Is" offer, if Inspected
  • Terms of Finance 
  • A Cash Offer
  • Personal Property Inclusions
  • Miscellaneous Favorable Terms to the Seller(s)

 

The Contract between my clients and the seller(s) was canceled immediately upon the Sellers receiving their other offer.  My clients were not provided the chance to revisit or renegotiate the terms of their previously agreed-upon (and signed) Contract.  I believe this explains why I could not get the Seller's Agent to respond tomy calls or communications regarding my clients.

What am I missing?  I'm looking to learn ...


There was absolutely NO reason for the Sellers to believe that my clients could not Close successfully. Wouldn't it have been at least reasonable to offer a renegotiation opportunity to my clients? 

My clients are now taking a time-out from buying.  This experience has left them in a bit of shock.  They'll jump back in, but it may be a while.  Until that time, we'll continue to communicate. 

But my initial question remains ... when is a real estate deal a real deal?

 

In New Lenox, the greater Chicagoland area, Illinois, or Wisconsin, contact me with your questions ...

I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf. I'm easily found at:
 
Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI License 216987
 
American Portfolio Mortgage Corp.
NMLS #175656
 
Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281
 

 

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

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Topic:
Home Buying
Tags:
buying a home
transactions
real estate contracts
realestate
mortgage process
deal making

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Rainmaker
1,544,507
Lottie Kendall
Today | Sotheby's International Realty - San Carlos, CA
Serving San Mateo County and San Francisco

Wow, that sounds awful. In California attorneys are not used in most cases, and that situation wouldn't have arisen. I can understand why the buyers feel battered and bruised.

Nov 09, 2017 10:49 AM #1
Rainmaker
217,421
Shannon Lefevre
John R. Wood Properties - Naples, FL
Shannon Lefevre, PA Your Naples Smart Girl

Oh NOOOO Gene! I'm so sorry to hear that!!! We don't have that clause in our contracts in Naples, Florida. Buyer has lots of "outs", Seller is more committed! Your clients must've been heartbroken. I'm sorry! I hope they find something better at a better value!!! 

Nov 09, 2017 10:55 AM #2
Rainmaker
743,451
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

HI Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - What a terrible outcome. I would think the buyers would be real leary of entering another deal. in AZ, we don't go through that process you described

Nov 09, 2017 12:54 PM #3
Ambassador
3,301,700
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene that stinks.  Did the Sellers reinburse the Buyers the home inspection fee?

Nov 09, 2017 02:39 PM #4
Rainmaker
3,423,594
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding and Marketing

Gene

That is awful...We had attorneys when leases were reviewed.  I could predict trouble with great accuracy, when the attorney stated...I am not a deal breaker, I am a deal maker...Sorry that this happened on your watch.  A

Nov 09, 2017 03:15 PM #5
Rainmaker
1,416,752
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

In Florida a deal is a deal when a contract is executed.  Then it is a matter for the parties to execute per the contract.  Glad we do not have that condition in our routine contracts!

Nov 10, 2017 05:45 AM #6
Rainmaker
1,110,491
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

As Lottie mentione, we do not have attorneys involved in standard real estate deals, at least in So. Cal. Also, a seller cannot arbitrarily cancel a contract unless the buyer has not performed (missed their contingencies deadlines). \Our contracts lean in the favor of buyers as long as they behave themselves.

Nov 10, 2017 03:38 PM #7
Rainmaker
2,483,890
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene, once we negotiated all the terms and contract points the buyer and seller are legally  bound by the contract, the only way it could have escape clauses, it the Buyer decided to renegotiate the price or the terms after the Physical Inspection or if the buyer fails to deposit the Earnest Money (3%EMD) or if they do not perform on any other contractually agreed points, Endre

Nov 11, 2017 04:03 PM #8
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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