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

By
Real Estate Broker/Owner with ADT Real Estate

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.

divorceIn 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.

 

college gift 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 gavel Before Signing That Contract!!

 

Until next time...

 

My name is Andrew Trevino. I am a Realtor, working in the Wilkes-Barre, PA area, and I'm affiliated with Realty World, Rubbico Real Estate. Thanks for investing your time in reading my blog. If you're interested in contacting me, please visit my website at http://www.wilkesbarrehomesales.com/

Comments (15)

Dan Forbes
Bradenton, FL
Don't forget to persue your commission. 
Sep 22, 2007 05:39 AM
Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552
Andrew, were the offers full price?  If so, could you not have gone after the seller (and sellers' agent, too, if they had prior undisclosed knowledge) to be paid for having brought a ready, willing and able buyer to them?
Sep 22, 2007 05:41 AM
Daniel Sundberg
Crystal Springs Real Estate - Kentwood, MI

You have a good point Andrew.  The two cases you specified were not seller's remorse though, they were blatant disregard for the details at hand.  

On the Seller's remorse subject though; it may possibly be the worst thing a seller can do.  Not only will the sale of the home be forced, but thousands of dollars in legal costs will added on top of the selling expenses. 

Sep 22, 2007 05:43 AM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale

Dan---I'm looking into that. The shame is that, oftentimes, it's more trouble than it's worth to pursue. I have my broker involved and we're seeing what we can get worked out.

Brian---I could have, but I have already worked out other deals for my clients and am content to let the buyers take their recourse from the sellers.

Daniel---Yes, you're right about the seller's remorse. I'll have to edit that part to better reflect the intent of my post. Thanks for pointing that out and for stopping by!

Sep 22, 2007 05:56 AM
Jason Schweiger
Network Funding LP - Auburn, WA
Loan Originator / Branch Manager NFLP
You need some compendation for your time and effort!
Sep 22, 2007 06:01 AM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale
Jason---I agree. The good thing is that my clients didn't dump me and we have new deals in the works, so I will be paid. One of them even told me they wanted to pay me a bonus. I declined, but gave them plenty of cards to share with friends. I love referrals!!
Sep 22, 2007 10:22 AM
. .
no thanks - Harlem, MT
It sounds like both of these situations could have been avoided if the listing agent did their job correctly. Sorry you and your buyers had to go through that. Chalk it up to a learning experience, and I hope you DO receive extra referrals! 
Sep 22, 2007 01:56 PM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale
Bridget---Yes, it was a learning experience. I'm sure I'll get extra referrals. These guys love me, even after all the problems. I'll take extra good care of them and pray that this doesn't happen again. Thanks for the comment.
Sep 22, 2007 03:01 PM
Theresa Sprindis @ Keller Williams Cherry Hill, NJ
Keller Williams - Cherry Hill - Maple Shade, NJ
I haven't gotten as far as sellers wanting out AFTER signing contracts. I have however dealt with two clients who after a couple weeks had remorse for signing the listing agreement. I have learned the hard way that if the client wants well more than the CMA shows it might be better to walk away from the listing!
Sep 22, 2007 05:20 PM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale
Theresa---Just wait, I'm sure the day will come and now you'll know what the consequences are. It's a tough thing to guage the emotional state of our sellers, but we really have to be able to guide them through the process. Preparation on the front end and a good awareness of the process will smooth the way tremendously. Thanks for stopping by and commenting. You're becoming a regular now. ;-)
Sep 23, 2007 01:00 AM
Diane Velikis
Coldwell & Banker Busch Real Estate - Luzerne, PA
Luzerne County Real Estate
Andrew, You bring up a very good point, and I rate you a 5. I have never personally been involved however I have made appointments to view properties that suddenly were pulled of the market because the owner changed their mind. I hope that your buyer finds something even better! Thats usually how God turns lemons to lemonaid     :)
Sep 23, 2007 01:38 AM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale
Diane---I'll post the rest of the story when the deals close, but don't want to give away any details right now. God definitely moved on behalf of my clients in these deals. Maybe I'll just have a glass of lemonade after our celebration lunch.
Sep 23, 2007 02:26 AM
Cynthia Tilghman, RealtorĀ® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC
Hi Andrew.
A good post with some good lessons.  I am a believer in things work out for the best--if I didn't believe that how could I go on?
Sep 23, 2007 11:38 PM
Andrew Trevino
ADT Real Estate - Wilkes Barre, PA
Wilkes-Barre Homes For Sale
Cynthia---You'd go on without hope, like so many do today. I'm glad that's not your case. Thanks for the comment.
Sep 24, 2007 01:57 AM
Membership Cancelled
Pullman, WA
We had two similar deals within 6 weeks of one another. It was CRAZY!!! I was starting to think that it only happened to us!
Sep 26, 2007 07:22 PM