Home Buying in Benbrook>Question Details

Some Guy, Home Buyer in Texas

Is it fraud if a house is put on another website during the option period?

Asked by Some Guy, Texas Wed Mar 19, 2008

I made an offer on a house which was accompanied by a $100 check for the option period. The seller made a counter offer which I accepted. The next day the listing agent put the house on another website. I didn't know that but I did wonder why the listing never changed to Active option. I had a home inspection done and there turned out to be extensive foundation damage. We could not come to terms on the repairs and I opted out. At the time I had no idea the listing agent was still actively marketing the property, I found that out today.

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Deborah Madey’s answer
Properties can be marketed for back up offers up to the day of closing. The accurate property status must be represented to the public. Most MLSs will not allow a property to show as active when there are contracts. Exact rules depend upon the MLS. Each MLS is an independent biz.

Other sites, such as Trulia, do not have rules about what properties can be submitted to appear online. Of course, in order for a broker or agent to submit a property listing, he/she must have a contract w/ the owner/seller for marketing representation.

So, yes, a property can be marketed and appear on websites. A buyer must be told the accurate status and availability. Example: A property has a contract, but the buyer has a contingency. It is common for the seller to continue to show the proeprty and expect their agent to continue to market it.
3 votes Thank Flag Link Wed Mar 19, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Maybe the listing agent was looking for back up offers in the event your offer did not come together. Most contracts allow a seller to accept an offer subject to the rights of offer number 1, which you were.

I am sorry you transaction did not come together.
0 votes Thank Flag Link Wed Mar 19, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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Sorry to disagree Glenda. In Texas the option period (usually 7 to 10 days) is a time frame at the beginning of the contract that a buyer has paid a fee for the right to change their mind, forfiet the option money fee, and walk away from the purchase. After this option period, the buyer is required to move forward with the contract and complete the transaction.
0 votes Thank Flag Link Wed Mar 19, 2008
If you have paid for option time under contract with a seller, the agreement is that you can buy it during that option time, or not. It is a time of discovery for the buyer. If the option time runs out, the seller can sell it to whomever he desires. The MLS in your area may have an option position shown on their mls, and maybe they do not. The listing agent must follow the direction of the seller, all legal direction. My guess is that the listing agent acted in the seller's best interest.
0 votes Thank Flag Link Wed Mar 19, 2008
The agent probably knew there was some problems and they were maybe looking for a backup offer. So they still try and advertise. This is a great plan and helps their sellers. You just never know if the buyer will stick. So they try to be prepared.
J.
0 votes Thank Flag Link Wed Mar 19, 2008
Agents don't usually like to take a house off the market OR to stop marketing the house till close to closing. There are sooooooooo many circumstances that a buyer may not OR want to purchase the house then you loss those days from effect marketing for the property
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Mar 19, 2008
The agent is required to change the status to "Active Option" in the MLS within 5 days of the executed contract. Every day after that the agent can be fined $50 per day for every day that it's not changed. Many websites don't have the capability of showing the "active option" status on them, instead it shows just active. As Deborah explained, the agent can elect to market the property for back up contracts up to the day of closing in case a buyer backs out during the option period. You paid the $100 for that right and you excercised it.
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Wed Mar 19, 2008
Even though you had come to agreement on sales prices, the contract was still, basically, contingent until your option period was over. YES, it should have been placed on Active Option, but the seller can request for their agent to still actively advertise the property until the contract actually becomes "PENDING". At that time, the agent is obliged to place the property in that status and stop actively advertising the property as available.
I guess I don't understand what you are asking because in the end, you didn't go through with the purchase anyway. Am I missing something? If you were asking if the seller could have negoiated another offer during this period, NO. They could, however, have taken a "back up" offer in the even that the home purchase did not go through.
Hope this answered your question to some extent.
Web Reference: http://www.kathlfisher.com
0 votes Thank Flag Link Wed Mar 19, 2008
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