Niecyt, Home Buyer in Sacramento County, CA

Can a seller refuse to sell me a property after I entered into a contract with him?

Asked by Niecyt, Sacramento County, CA Sat Aug 22, 2009

I have paid for the appraisal, the pest inspection, the HVAC inspection and the whole house inspection. I even paid for the final inspection to see that the repairs were done that he agreed to do under my FHA contract. He now refused to give me an extension of time to finish getting the funding. I had to wait until everything was done to finally get the mortgage, spent $1000 on all this and also have a deposit of another $1000 in escrow and now he refuses to sell it to me unless I pay more. He has relisted the property and we are just about to close escrow any day. He was aware that it was FHA funding and they are particular. I had to wait until he did repairs to finalize the documents and send them to the lender. He refused to sign a 15 day extension. It has taken longer than anticipated but most of the time was spent waiting on him. What can I do?

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Hello Niecyt and thanks for your post.

Unfortunately, as Realtors, we are not equipped to handle the legal aspects or interpretations of contract laws for our clients. Since this is a contract matter, it is best resolved by consultation with a qualified real estate attorney. As Sue noted below, if you cannot afford a "per hour" lawyer, you can certainly afford Prepaid Legal, a low cost legal service available in most states, to assist you. You can reach them at http://www.prepaidlegal.com and can sign up this weekend for contact with an attorney as soon as possible.

As a wholly "unlegal" opinion, however, contracts are, by their very nature, "push and pull" transactions that depend almost entirely upon clear, timely communications between buyers and sellers to ensure that each party understands the progression and works effectively toward closing. If there are delays in the financing and close of escrow, the Seller can certainly claim breach of the contract and move on, but seldom does this happen if both sides feel they understand the situation thoroughly, are of the same mind, and/or, if there is any inconvenience on the part of either party, the inconvenienced party is somehow compensated for the loss.

In this case, you have to ask whether or not the Seller and listing agent were apprised of the progress or problems in the loan early on or if this all came as a surprise at the end of the transaction. If the latter is case, I can understand how the Seller is now doubting whether the transaction can be completed or if it wouldn't be better to find another buyer--you might feel the same way, too, if the roles were reversed. It can often be helpful, in such situations, for your agent's broker to speak directly with the broker of the listing agent to try (broker-to-broker) to resolve the problems. Otherwise, it will become a legal matter. And, if the Seller does decide not to sell to you, the Realtors do NOT necessarily get paid as one agent noted below. The only time the buyer's agent will be compensated is if the Seller's agent is compensated for this transaction because the buyer's agent is a "sub-agent" of the listing agent. Since it is unlikely that the Seller will compensate the same listing agent twice for one transaction, and the listing agent won't jeopardize not being paid for at least one sale, there's small chance (in my completely unlegal opinion) that the Seller will be responsible for payment of the same commission twice. (This applies to California only)

Good luck with this transaction and get in touch with Pre-Paid Legal if you cannot afford to pay an attorney by the hour.

Sincerely,
Grace Morioka, SRES
Area Pro Realty
San Jose, CA
1 vote Thank Flag Link Sat Jan 16, 2010
In a situation like this there can be many answers, none of them easy. Did the Seller serve you with a demand to close in 3 days? If so and if you were out of time according to the original contract and could not close within just 3 days then they would be at liberty to cancel. You should have received a refund of your deposit, and that is the only financial obligation they have. On the other hand if they just served you a cancellation notice, this is not in accordance with the required procedure and you do not have to sign it. The Demand to Close form is required. The Seller has an obligation to perform according to the agreement just and the Buyer does. If you feel you have been harmed by the Seller you should consult with a real estate attorney to find out what your rights are in this situation.
0 votes Thank Flag Link Fri Apr 13, 2012
You need to retain an attorney who handles Real Estate matters ASAP.
0 votes Thank Flag Link Sat Jan 16, 2010
The seller has no obligation to grant you an extension of the closing date, unless you have already agreed to do so as part of your existing contract.

If the Seller was in breach of the contract, it may make it voidable on your part, but it doesn't give you the right to an extension.
0 votes Thank Flag Link Sat Jan 16, 2010
I am in this same position what was your outcome?
0 votes Thank Flag Link Sat Jan 16, 2010
Good additional point, Sue, about commissions owed and the FHA case numbers!

Anna Boyd - Re/Max Gold
El Dorado, Sacramento, Placer
Ph: 916-813-3534
Fax: 916-404-5914
Lic. # 01043604
anna@annaboyd.com
Web Reference: http://www.annaboyd.com
0 votes Thank Flag Link Sun Aug 23, 2009
He owes the realtors their commission, even if he goes with another buyer. That alone might be enough to just keep the deal going. However, he could be creating this pressure so that you keep your pressure on your lender. You have not complied with the current contract, and even though it's your lender and not you, the lender isn't listed on the contract. In addition, if he found another buyer, he probably isn't aware that FHA allows only one case number per property and another FHA buyer cannot get a loan unless yours was released.

This is a case where I have my clients call their pre-paid legal services so that an attorney gets involved, if nothing more than for piece of mind and understanding their legal rights in this matter. If you need information on that, just let me know because it's not related to being a realtor. (I don't want to get in the middle there, just give you the attorney info). At $35/mo, it'd be much cheaper to get an attorney on your side.

Hang in there. It will close but I think you need some pressure on your lender.
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Sun Aug 23, 2009
My understanding is the escrow continues until one party or the other cancels - even if it's technically beyond escrow close date. Did they present you with demand to close escrow within "x" days or cancel?

As Tim mentioned, if the buyer is acting in good faith, I'd push back on this one and get the managing brokers involved.

I had one escrow that went a couple days beyond and seller was adamant he wouldn't allow it to close - I just kept on proceeding forward as I hadn't been presented with cancellation. When money came in to close, seller allowed it to close.

If I was selling agent I'd be making some noise - particularly in this day and age when escrows can take longer through no fault of the buyer.
Web Reference: http://www.annaboyd.com
0 votes Thank Flag Link Sun Aug 23, 2009
Case law that I have seen indicates that if the buyer is operating in good faith to complete the transaction a "reasonable" delay does not allow the seller to back out of the transaction. I would definately get the buyers broker involved and consult with an attorney. Good luck.
0 votes Thank Flag Link Sat Aug 22, 2009
As a listing agent, if the buyer's agent has ot communicated clearly with me, I would probably advise my seller to re-list. How much more is he listing the home for? I would get your buyer's agents broker involved immediately.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sat Aug 22, 2009
Cindi Hagley…, Real Estate Pro in San Ramon, CA
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