Make Sure You Want to Sell Before Signing That Contract!!

I have had two instances over the last three weeks where I was representing buyers in their attempts to buy properties and the seller has decided, at the last minute, not to sell. I am amazed that someone could get to the week before closing and decide not to perform the contract that they negotiated and signed weeks before.

This leads to some interesting situations and can have several outcomes, including being sued for Specific Performance and being forced to sell the property. I've found that this situation was caused in both cases by the selling agent not fully comprehending (or turning a blind eye to) the seller's intentions in selling the property.

In one case, the seller was going through a divorce and wanted to sell the property without the spouse finding out about it. The problem was that the property was refinanced in both names a few years ago, casting a shadow on the title and necessitating a signature from the spouse in order to close. When the spouse was notified, they wanted their half of the proceeds, causing problems with the sale of the property. The selling agent was aware of the situation from the start, as the seller is a relative. This was not in any way the fault of my client, who was out quite a bit of money for inspections, plane tickets, appraisals and loan prep fees.

In the second case, the seller wanted to gift the property to a local college at the closing which would have meant a double close. He would have given the property to the college and the college would have sold the property to my client. Again, the selling agent knew what he wanted to achieve. We wrote a contract, stating that my client would be financing the purchase with an FHA loan, and the contract was accepted by both parties. We got two days from closing and I got a phone call from the selling agent telling me that they couldn't close because of my client's financing option. You see, FHA requires a 90 day seasoning period for any deed before it can be sold. This meant that, in order for him to get what he wanted, we would have to wait 90 days to get a good deed. Not an acceptable situation for my client. There's a contract with all of the facts spelled out. If the deal didn't go to closing, my client would be out money. If we waited 90 days to go to closing, once again my client would be out money.

In both of these situations, the seller should have been made aware what needed to happen in order for their desired result to be accomplished. In both cases, they wanted to back out of the contract at the last minute, causing damages to be incurred by the buyers. I always try to find out as much info as possible about what my seller's motivation and desired result is before I get them to sign any contract. If there's a situation that needs to be addressed, I try to find them an answer and always recommend they get an attorney to look over the contract before it's signed. Because things didn't work out as you planned isn't a good reason not to sell. If you have stipulations that you want to fulfill, they have to be in the contract. Backing out of a contract will most likely place you on the losing end of a court battle. This is why it's important to...

                        Make Sure You Want to Sell Before Signing That Contract!!

Until next time...