Pat Kapowich for the San Jose Mercury News
Q: We just received a notice that the seller of the home we are buying has changed her mind and does not want to sell after all. Evidently , the agents involved have already unsuccessfully tried to convey the importance of honoring the purchase contract and the closing escrow. The seller wants to return our earnest money deposit and reimburse us for our inspections. We feel this is completely unsatisfactory. Our landlord has informed us that new tenants will be occupying our apartment in less than a week. We’ve invested weeks in the sales process of the particular home, which was preceded by months of house hunting. The thought of doing this all over again is unacceptable. What do buyers do in our situation?
A: Real estate attorneys know when a market is turning by the clientèle sitting in their lobbies. When buyers are trying to cancel their sales, that means prices are stalling or declining. Conversely, when sellers say, “You’ve got to get us out of this contract,” prices are leapfrogging upward throughout their neighborhood. In both cases, usually these unilateral cancellation attempts are made after the buyers have removed all contingencies, solidifying a solid transaction. Legal fees aside, in residential real estate it’s much more common to force a seller to sell than make a buyer buy.
In a buyer’s market, sellers change their minds because they are unable to find suitable replacement property to meet their needs. Even more likely is that a seller has a change of heart because the home is filled with fond memories. This is often at the end of a transaction period when the empty-nesters begins taking down family photos.
Since both agents fulfilled their ends of the bargain, the seller is liable for the brokerage fees due to both agencies. However, residential firms will not pursue paychecks from canceling sellers because of the adverse publicity. This is all the more reason defaulting sellers should compensate buyers for their trouble.
You should be sitting in a real estate attorney’s lobby, too. Sooner rather than later, if you decide to fight for the house the attorney might counsel you to pursue ever step of the normal selling and closing process, including approving the loan docs at an escrow company “sign-off.” That alone might persuade the seller to sell. Regardless, you’ll have to move out on schedule. Depending upon your lease, you could be charged double or triple rent per day for being a “holdover.”
Saturday, December 6th, 2008
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