Home Buying in New York>Question Details

Anthony Juli…, Real Estate Pro in Richmond Hill, NY

I found a house, got an "accepted offer", had an inspection done, signed contracts that was drawn by seller attorney( see cont.)

Asked by Anthony Julien, Richmond Hill, NY Sun Feb 24, 2013

my attorney delivered the contracts same day. After few days I get an email from the broker that the have higher offer!!!
Who can I blame for this? listing agent suppose to show property after contracts were sent out? I also met the seller and agreed upon all terms. I paid inspection fee and legal fee and would like to know who I can hold liable for it
Thanks

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17
Mitchell Hall’s answer
In NY state neither buyer or seller has any legal obligation toward the other until there is a fully executed contract. The listing agent may have shopped your offer to other buyers, unfortunately it is perfectly legal and a common practice.

Although the seller accepted your offer and sent out a contract, a seller's word is not legally binding. My suggestion for the future would be to hire a buyer's agent to represent your interests.

The listing agent has a fiduciary duty to their seller client. Their job is to get their client the highest and best price. Unless you signed a dual agency disclosure, you are an unrepresented buyer dealing with a seller's agent.

While there is always the possibility of another buyer coming along before the contract is executed a good buyer's agent is often aggressive and will move the transaction along to avoid the possibility of another buyer getting the home.

I'm sorry this happened but it is not uncommon. Often buyers will lose a few homes before they become aggressive enough to make sure it won't happen again. A buyer's agent can make a big difference.

Best,

Mitchell Hall
Senior Associate Broker
The Corcoran Group
347-921-4255
mhall@corcoran.com
http://nycblogestate.com
3 votes Thank Flag Link Mon Feb 25, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
Great answers. Unfortunately you might not have many options. You can sign contracts, and before the seller gets to sign, they can indeed accept a higher offer and simply cancel yours or make it a back up offer. Speak to your attorney and see what your options are. I'm pretty sure you're going to be out of whatever you've spent so far. Sorry!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
2 votes Thank Flag Link Mon Mar 4, 2013
Unfortunately, unless an executed contract is in place, signed by all parties and deposit money is exchanged, the seller is free to do whatever he/she wishes. For any necessary legal advice, consult with your attorney, don't just rely on online information...
2 votes Thank Flag Link Mon Feb 25, 2013
Jim,

Real estate practice in NY is diferent from that of Florida. Your advice is not every likely to ever happen. I wish we did business that way but NY is different is from the rest of the country.

Janet Nation, CBR
Sailing Home Realty
Direct: 646-321-9649
Office: 516-377-4760
Licensed Real Estate Salesperson
http://www.jnationproperties.com
1 vote Thank Flag Link Sun Feb 24, 2013
Hi Tony,

There is no one that you can hold liable for this. Unfortunately this is an all too common occurrence and since the market is heating up, it will continue to happen more. The only suggestion I can give is that next time you should sign a contract that is contingent upon a satisfactory inspection. This binds the property and allows you to get out of the contract if there is something big that comes up in the inspection. This supposes, of course, that the seller is willing to sign such a contract.

Good luck in the future.

Sincerely,
Joe Greene
Broker/Owner
WEICHERT, REALTORS - House & Home
(718) 432-5000 (Office)
(917) 974-2600 (Cell)
609 Kappock Street Suite 1A Bronx, NY 10463

joegreene@weichert.com
http://www.WeichertWorks4U.com
1 vote Thank Flag Link Sun Feb 24, 2013
Was the contract signed by both buyer and seller??? I recommend you contact your attorney regarding this.
0 votes Thank Flag Link Mon Feb 25, 2013
Good morning Jim,

In NY the home inspection is done PRIOR to signing a contract NOT the reverse so that gives the seller time to change his mind or accept a higher offer, as well as the buyer can also change his mind and walk away; it works both ways.

There's NOTHING in writing other than a written offer which we call the Sales Agreement or more commonly called The Offer. The Sales Agreement/Offer is signed by the buyerwhen presenting an offer but very rarely signed by the seller. This would have given Tony more of a leg to stand on as it's actually legally binding but sellers DON'T typically sign the other half of Sales Agreement/offer and you can't force them; this is how it's been for years now - common practice.

So with that there is NO legally binding contract until a returned signed copy, with the sellers signature included, is sent to the buyers attorney; this is what we call a fully executed contract. Tony didn't have a fully executed contract in place so despite the other out of state advice he doesn't have a leg to stand on. Maybe, just maybe out of courtesy the seller can reimburse Tony for the home inspection, he can ask his attorney to help with that but it doesn't always happen. The best thing for Tony to do is move on and find another house with the knowledge of knowing that this could happen.

Not the best system, but it is what it is, I hope that's a little clearer. Have a productive day.
0 votes Thank Flag Link Mon Feb 25, 2013
Tony,

Your mistake at this point may be not directing these question to your attorney that delivered your purchase offer. They should be able to clarify your options at this point.

With this said, a purchase offer is normally not a valid one until it has been completed, signed by all parties, and delivered. Speaking with your attorney on this is important!

Good luck,

Bill
0 votes Thank Flag Link Mon Feb 25, 2013
You signed a contract and your contract is valid. Seller can not sell it to another buyer for a higher price unless you withdraw the offer and void the contract or you don't qualify for a loan. You should send a letter for performance to the seller's agent and in that letter indicate that you are goignt to take a legal action if the seller doesn't perform and sue them for breach of contract. MAKE AN APPOINTMENT WITH A REAL ESTATE ATTORNEY AND HAVE HIM SEE THE CONTRACT AND GIVE YOU ALL THE LEGAL OPTIONS YOU HAVE TO FOLLOW. ALSO TELL THE SELLER'S AGENT THAT YOU ARE GOING TO REPORT HIM TO THE DEPT OF REAL ESTATE AND HE WILL LOSE HIS LICENSE FOR HIS UNLAWFULL ACTION.
0 votes Thank Flag Link Mon Feb 25, 2013
Janet, not sure what that means. Are we talking common practice or law? Do NY contracts not offer an inspection clause? Though I lived there for many years, I never bought or sold there, so I am not familiar with how the contract process works in NY. Thanks...
0 votes Thank Flag Link Mon Feb 25, 2013
Hi Tony. It's crazy, I know. Contracts! This is how the proverbial cookie crumbles and it happens every day. That's why there's a rush at the front end of an accepted offer to get a contract signed by both buyer and seller. Once that's done, you're locked in pretty much.

No one to point the accusing finger of blame at in this instance. The seller exercised their right to accept a "better" offer, whatever that was. As the contract was not countersigned, there was no contract to execute. No way to compel your deal to go forward. Your fees were part of you due diligence and was most likely in your contract. Ask your Attorney but I don't believe there is anyone you could go after. Better to move forward to the next opportunity. Good luck.
0 votes Thank Flag Link Sun Feb 24, 2013
Tony, as several others have said, there is no one to hold liable in this situation. Until contract is fully executed meaning both buyer and seller have signed and a fully signed copy is returned to your attorney, it is not a legally binding deal. Brokers are able to continue showing even after an accepted offer (but are generally not supposed to show after a fully executed contract is in place). Your situation happens occasionally and is very frustrating. Have you considered raising your bid to regain the property? The broker has an obligation to present all offers to the seller.
0 votes Thank Flag Link Sun Feb 24, 2013
Charlie,
I did match the other offer the had but the said that the other offer is with no mortgage contingency and this is something I couldn't risk. The went ahead and signed the other contract. Agent showed the house after I signed contracts!!! Very Unethical
Flag Mon Feb 25, 2013
Sounds to me like you did not have a contract signed by the seller? That's not an "accepted offer", it has to be signed to be executed. As said previously, get a bi-latteral contract before you spend any money. If the inspection turns up something you don't like, you exercise the option to walk and get your earnest money back...
0 votes Thank Flag Link Sun Feb 24, 2013
Dear Tony,

Unfortunately you can hold no one liable, there's nothing an attorney can do for you other than tell you what I about to tell you as well as Joe Greene. I personally ALWAYS inform my buyer clients that the seller can accept another offer before a contract is fully executed even if after a home inspection is done just like a buyer can change their mind also and leave the seller looking for another buyer. It happens all the time unfortunately especially in certain areas.

The listing agent should always disclose the true status of the listing when someone inquires. I get the feeling you were working directly with the listing agent, and didn't have your own agent. At any rate, if you were first, it would have been a decent thing to give you an opportunity to increase your offer but who knows who were dealing with.

Now you know,be aware and hopefully it won't happen again. Try to find an agent that can educate you on this process, I too wish it didn't have to be this way.

Janet Nation, CBR
Sailing Home Realty
Direct: 646-321-9649
Office: 516-377-4760
Licensed Real Estate Salesperson
http://www.jnationproperties.com
0 votes Thank Flag Link Sun Feb 24, 2013
tony, I sorry to read about what happened to you. I would recommend
to speak with your attorney and is if some how he might give you any
advice. But if you need an agent to work for you. Please feel free to call me.
Thank you.

Fajardo Delacruz
Licensed Real Estate Agent
Century Homes Realty Group llc
Direct Line: 347-932-060
0 votes Thank Flag Link Sun Feb 24, 2013
Hi Tony, if you did not try to change anything off the originally accepted offer. The seller should reimburse you for your inspection fee. They should have told you about the higher offer and asked you to meet that offer- before they accepted another. Talk to the agent...if you tried to negotiate after the inspection- you can forget it. Terry 718-614-3167 or email TKorahais@elliman.com
0 votes Thank Flag Link Sun Feb 24, 2013
The listing agent is legally obligated to present all offers to the sellers until contracts are fully executed, signed by both you and the sellers. It's not typical for something like that to happen but it is definitely possible. If the offer was not higher than yours and it was accepted then there would be an ethical issue.
0 votes Thank Flag Link Sun Feb 24, 2013
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