Home Buying in Austin>Question Details

Rainrobber, Home Buyer in Austin, TX

Homeowner threatening to put house back on market and back out of contract 3 days before closing

Asked by Rainrobber, Austin, TX Sat Apr 3, 2010

We have completed everything on our end to complete the purchase of a home. The homeowners are now threatening to back out of our contract and put the house back on the market. What can we do about this? We live in TX.
They have already updated a listing they did on their own and removed the under contract accepting backups now it just looks like it is for sale again.

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Go to your scheduled closing at the Title Co. and sign. Verbal threats to back out and multiple listing status changes have no impact on you. In Texas, contracts involving the sale of real estate... must be in writing.
1 vote Thank Flag Link Sat Apr 3, 2010
Looks like the Seller may have saved a few bucks on the listing commission and now, they get to pay LAWYERS! Professional REALTORS®, by comparison, are very inexpensive. The kind of Seller who uses those "limited service" brokers is trying to get the benefit of the huge marketplace that we REALTORS have created by our mutual hard work, without paying for it. If they haven't been properly advised about disclosures, contract requirements, etc., they may get to pay several times the little amount they "saved" in commissions in legal fees and damages. (Frequently, they wind up selling the house for less than it's worth, also.)

If you show up for closing and sign your documents, and they refuse, Texas law allows you to sue to enforce specific performance. Your REALTOR should know a good attorney who can write them a demand letter and "explain the benefits" to them for a minimal (if any) fee. If suit is brought, you may also be able to recover damages and legal fees.

I assume that your first goal is to close the deal and get the house. So, keep the emotion in check, be polite but firm. As long as you have done what you agreed to, you should expect the other side, regardless of any bluffs they want to run, to be required to perform as they agreed. Failure to do so can be VERY expensive for Sellers in Texas.

One other thing - If the Sellers' agent is advertising the home as not being under contract, and if you have not breached the contract, file a complaint with the Texas Real Estate Commission (http://www.trec.state.tx.us) and help get them out of the business. Call your local Board of REALTORS and ask them to appoint an Ombudsman to resolve the issue.

Good luck.

Doc Stephens, REALTOR®
3 votes Thank Flag Link Sat Apr 3, 2010
Rainrobber in Austin, TX:

You've had several comments suggesting you seek legal advice. I see that you live in Texas. If you are buying in Texas and have fulfilled ALL of your obligations as a buyer (per the terms of the contract: financing approval, etc.) and a Seller is threatening to terminate, you have specific rights and remedies (per the contract.) I am assuming that the seller is threatening to terminate; however, you don't actually state that. Are they threatening to terminate? Or, are they wanting to continue advertising the property for sale? What is also not clear to me is if got under contract on this property while utilizing the expertize of a licensed real estate professional or not Are you dealing with a "for sale by owner?" Do you have an agent? Was this property listed with the local MLS system? If so, there are specific rules regarding how a licensed agent, who is a member of the MLS can code (or advertise) a property once it is under contract. While your agent cannot give you legal advice, your agent can tell you the terms of the contract. Regardless, you have the right to seek legal counsel.

If you are dealing with a licensed professional, that agent should be working to assist you. Good luck!


Jill Bretcher
Keller Williams Realty
Austin, TX
2 votes Thank Flag Link Sat Apr 3, 2010
They have updated the listing to taking backups and state they have movers for tomorrow. However movers were suppose to have been planned for this past Friday for almost 60 days. It looks like we will be closing tomorrow now. Our realtor has advised against a lease back out of fear they may do something to the property that would take longer to get money for verses doing a final walk through right before closing.

Yes they are an older couple and have been in the house for 25 years they claim they want to leave. I am just waiting for the next excuse. They actually called our banker and tried to get our financing details. They have been told by banker, realtor and underwriter that our financing was set and there were no issues yet they still wanted our details.
1 vote Thank Flag Link Mon Apr 5, 2010
Good evening,

I am a Real Estate Attorney here in Austin with 8 years of mortgage (mortgage broker) and 4 years of real estate (Realtor) experience prior to starting my practice. My firm is well adept and working with issues such as yours.

The link to my firm's website is below as well as my office and cell numbers

Best of luck and please do not hesitate to contact me. I included my LinkedIn profile as well for your reference.

John Hay
Hay Compere PLLC
512-467-6060 (o)
512-658-0009 (c)
http://www.haycompere.com
1 vote Thank Flag Link Sun Apr 4, 2010
Let me know if you need a good Real Estate attorney. I will be more than willing to send you one that has been in the business for more than 20 years.

Good luck

Ray Mungia
1 vote Thank Flag Link Sun Apr 4, 2010
Nancy's analysis of the situation may well be correct, but I respectfully disagree with her advice, particularly the first suggestion.

Get 'em out of the house! My gosh: Offering a lease-back agreement when the homeowners are trying to back out anyway?!? They'd just love to still be sitting there. No. The instant the property closes, you get the keys. They're the last sort of people I'd want in a home I'd just purchased. If they've gone so far as to update a listing, removing the "under contract" notice, I wouldn't put anything past them.

I stand by my original advice: (1) get an attorney, and (2) ask your agent whether it would be appropriate for him/her to rationally explain the situation to the sellers.

Let us know how this turns out.
1 vote Thank Flag Link Sun Apr 4, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Without additional details it is hard to understand the sellers motivation. If you are truly 3 days away from closing I see no reason for them to be wanting to back out. If you are beyond the closing date on the contract they have every right to do so and possibly have what they think to be a better offer. If you are still under the original contract and have not gone beyond the closing date they are bound by the terms of that contract and must sell the home to you.

I would have your Realtor speak with them to get a resolution and if necessary consult a real estate attorney if you feel they are violating the terms of the sales contract.
1 vote Thank Flag Link Sat Apr 3, 2010
I agree the sellers should not be calling your lender directly, that is unusual. However if both of the Realtors invoved with this transaction stay in communication with each other and the title company and the lender, there should be no big worries for the seller. I see poor communication as the biggest problem in this business. If your agent can keep you informed of each step of the transaction you should feel comfortable that things are progressing smoothly. I few phone calls can usually stop this type of fear/concern about the closing. I wish you the best with this transaction.
Sincerely,
Betina
0 votes Thank Flag Link Fri May 21, 2010
I agree the sellers should not be calling your lender directly, that is unusual. However if both of the Realtors invoved with this transaction stay in communication with each other and the title company and the lender, there should be no big worries for the seller. I see poor communication as the biggest problem in this business. If your agent can keep you informed of each step of the transaction you should feel comfortable that things are progressing smoothly. I few phone calls can usually stop this type of fear/concern about the closing. I wish you the best with this transaction.
Sincerely,
Betina
0 votes Thank Flag Link Fri May 21, 2010
Yes, a lease back is not a good idea at all.
It sounds like they are moving out tomorrow, day of closing.
Don't forget to ask your Realtor about your final walk through before closing. There may be a 2 foot hole in the wall behind a couch they were covering up, etc, etc, etc, all the way through the house with so many possibilities.
Why they are moving out the day of closing sure is "last minute". Do your walk thru first!

In response to previous activity, your Realtor should have contacted listing Agent/Broker to find out why the home went active, and why taking back ups (if the home should be Pending status).

Anyhow,
good luck, congrats! and don't forget about your walk through prior to closing!
0 votes Thank Flag Link Mon Apr 5, 2010
Dear Rainrobber,
I would consult a good real estate attorney. The people at Hay Compere are lawyers that specialize in Real Estate law. You can find them on the Trulia website. Give them a call or make an appointment to speak with them and bring copies of everything you have. The key to any transaction is to have everything in writing. Make sure your Realtor is involved as they will be one of your best assets. I wish you luck closing on the home.
Sincerely,
Betina
0 votes Thank Flag Link Sat Apr 3, 2010
RR
A few quick tips:
The ONLY people who should advise you need to have read all of the documents. As one poster mentioned, in real estate, it all needs to be in writing.

The broker that they have selected to list their property may or may not be a member of the National Association of Realtors. They may just be a DRE licensee. None the less, they are bound to follow the laws of Texas regarding real estate transactions.

The financing side of Real Estate is very tough right now. Many sellers are concerned about buyers being able to close on time, if at all. Because it appears that your sellers to not have (just my opinion) professional representation, YOUR Realtor is going to need to go the extra mile to get this home for you.

1. Ask for a meeting with the sellers and your Realtor and their agent.
2. Identify the concerns that they have.
3. Resolve to answer their concerns, in writing, asap.

MOST transactions are NOT closing on time these days. They will close, but if your seller has a hard deadline, since you are already well into the process, they may need to know that you are:
Serious
Capable of closing
Are fighting to proceed vigorously....as opposed to sitting back and letting the chips fall as they may.

Good luck.
0 votes Thank Flag Link Sat Apr 3, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
You need confer with your buyers agent WHY would seller back out of contract sounds odd to me.

Confer with terms and conditions of contract of buyer/ seller obligations close or cancel clause of purchase of home.

Lynn911
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Apr 3, 2010
Without knowing all the details, you might want to have your realtor investigate if something else is going. Is there a 3rd party involved ie: a bank or an Attorney. If you've got everything in place and they can't close maybe they are playing around, but if there's a funding delay of some kind (not unusual in todays market) maybe theres a foreclosure luming and the sellers are scrambling to find a cash buyer..

Anyway without knowing all the details that maybe whats going on.
0 votes Thank Flag Link Sat Apr 3, 2010
If you have performed and satisfied the inspection and mortgage contingencies, then it seems to me you are headed to close. I hope that you have a good real estate atttorney working for you. Incidentally, if you have satsified all contingencies, then your attorney may serve "time is of the essence" to push for the closing. As to the seller relisting, I'd recommend your agent contact the MLS, there are rules, and it sure sounds as if they are being violated based on what you have shared.

But the most important thing for you to do is to be working with your attorney on this. Good luck, so sorry that you are having this experience, heaven knows the process is stressful enough.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sat Apr 3, 2010
Go to an attorney as soon as possible to block the possible sale to anyone else.

Also, your agent should talk to the sellers and explain the situation--specifically to (1) reassure them that the sale will take place, and (2) to inform them that you will protect your interests if the sale does not take place.

Be sure to have both done. (Don't try to play the understanding buyer and just pursue the agent route. That's necessary, but so is the lawyer.)

Hope that helps.
0 votes Thank Flag Link Sat Apr 3, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Tx contracts are heavily weighted to the buyer as to protection and there is virtually no out for a seller "just because they want to". The financing is in the buyers hands, the option period is as well, and any repair requests, which may not be met by the seller, also give the buyer the option to terminate within the option period; however there is nothing in the contract that gives the seller the right to terminate so they are in jeapordy of default and you have a right to claim specific performance damages. I would advise to talk to a real estate attorney.
0 votes Thank Flag Link Sat Apr 3, 2010
Financing is done... we are suppose to close on Monday and yesterday they freaked out on our realtor.
0 votes Thank Flag Link Sat Apr 3, 2010
We have a realtor they on the other hand used some shady MLS listing company that claims they are a realtor but they are not.
0 votes Thank Flag Link Sat Apr 3, 2010
Reading between the lines it looks like a delay... You asked them to fix something, then did an amendment, then submitted the amendment back to the bank. The bank now wants to make sure it is complete... So they've done everyhting for you on your side but the bank is jerking around the financing... That makes sellers really nervous especially when the closing date is pushed or missed.

In a situation, like this you need to make the seller feel like you are not personally jerking them around. Do everything in good faith to make it so. If it means putting some additional money in escrow, do it. Besides, if you are really going to close it doesn;t matter how much money you have in escrow.
0 votes Thank Flag Link Sat Apr 3, 2010
Are you representing yourself on this sale? Are their any agents/attorney's involved?
0 votes Thank Flag Link Sat Apr 3, 2010
Additional information: Due to the new rules with the appraisal companies our financing was set the company didn't go back out to check the repair they required and instead sent another company to do the check which did a complete appraisal and make it look like we had financing problems. Even though they called our banker and were told we were all set financing wise. Additionally they wanted a written gty from the bank and underwriter that we would for sure close on the 5th prior to the appraisal company going back out and checking the property.
0 votes Thank Flag Link Sat Apr 3, 2010
Why would they do this?
There is more to the story?
Did you miss closing?
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Sat Apr 3, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Hello Georgia and thanks for your question.

Typically, sellers do not threaten to breach or break a sales contract unless there is the perception that the buyers have, in some way, violated the terms of the contract. I know you feel that you've done everything possible as the buyers to fulfill the contract, but there is obviously something still wrong to create doubt so great that the sellers have made moves to present the home for sale again.

Talk with your real estate agent to obtain more information. Both the listing and selling (buyers' agents) should be communicating right now to see if there is any way to restore the seller's confidence.

As for what can be done to enforce the contract, this is a question best answered by a qualified real estate attorney in your area. Talk to your agent or contact the local Bar Association for the name of an attorney in your area.

Good luck!

Sincerely,
Grace Morioka, SRES
Area Pro Realty
San Jose, CA
0 votes Thank Flag Link Sat Apr 3, 2010
What is your agent advising...not knowing any of the details that caused the situation--consult with an attorney who specializes in real estate sooner rather than later and check out all your options.
0 votes Thank Flag Link Sat Apr 3, 2010
Ask your realtor about this. A contract is a legally binding document. Depending on how it is written it may not be able to be gotten out of. You may have to file a legal suit to make it happen. That suggests talking to a real estate lawyer after talking to your realtor if this is not resolved easily.
0 votes Thank Flag Link Sat Apr 3, 2010
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