Yuk. So sorry to hear about this. I can't imagine the frustration. There seems to be a lot more to the story. There are several processes that should have caught this long before the close date. Not sure without knowing more details about what happened.
Taking a wild shot in the dark here, but if it walks like a duck and quacks like a duck.... This one sounds like a nightmare. Try to get all you can back with the use of a RE attourney. Then wipe your hands of it and find yourself the house of your dreams elsewhere.
Like breaking up with an old flame, living well is the best revenge.
Your seller had a "rock bottom number to avoid a short sale," this number is a moving target unless supplied by the lender directly as a payoff. Daily interest accrues, penalties add up. All too often the seller looks at their previous balance and assumes this is a payoff, and it's not.
To release the earnest money back to you, a Release form has to be signed by the sellers and yourself. Whoever is currently holding the earnest money, a title company or your agentâ€™s office has control and not the seller. There is no benefit to the seller to tie this up and make a claim to it as it appears they defaulted and not you.
Getting the brokers of both companies involved immediately and letting them know an attorney will be reviewing everything would be a good plan.
First, I'd contact both the brokers from each offce and see what kind of remedy they may offer you.
If that is not satisfactory, I'd call the Multiple Listing Service and the Department of Licensing to report the Listing Agent, if they really knew all this information. If it was passed on to your agent and she/he did not notify you, she/he should also be reported.
The lat resort, which can be expensive, is to contact a real estate attorney. Something is gravely wrong here.
As to the bankruptcy issues, if it was a Chapter 7, then chances are the case would be closed up by now. If it wasn't, then a "motion to abandon" would be necessary for the debtor to sell the property. If the case was a Chapter 13, the debtor would need a motion to approve the sale. Neither would be very complicated in most situations. That could depend, however, on the value of the property both relative to the offer price and the debt against the property.
Wow! You have a lot of separate issues going on here.
1st â€“ It all begins with the question on F17 â€“ do you have the legal right to sell this property?
2nd - If the bankruptcy was filed a year ago, it seems to me that part of it should be settled. If not, it may be possible for the house to be released for sale through a fairly simple procedure.
3rd â€“ If the seller has not made payments that brings up the question, is there sufficient equity to pay off the encumbrances? If not, that puts the home in a short sale situation. If only a few payments have been missed, depending on who the lien holder(s) is, it may be an easy short sale. If it is a short sale, the listing agent has an obligation to note it as such in the MLS listing so buyers know up front.
4th â€“ You certainly should be entitled to your earnest money back as you are not the party that defaulted.
5th â€“ If the listing agent truly knew the situation, yes there should be accountability. Start with contacting the broker of the firm. I donâ€™t understand why a listing agent would not disclose knowledge of this nature up front, rather than working on a transaction that will never close. I definitely agree, you should immediately contact a good real estate attorney. A good attorney may be able to sort this out and get you in to that home. If you do not know of a good attorney, drop me a line by email through the web site below and Iâ€™ll be happy to recommend a couple of attorneys that I have worked with in the past.
RE/MAX Metro Realty
The title company would have had the payoff on file, in order to draw the closing docs. Also, any recorded documents affecting this property would have shown on the Preliminary Title Report.
Associate Broker, ABR,GRI,CRS,CRB
The first thing I would do would be to raise heck with the title co. who processed this sale!! They should have
had documents proving clear title,other than the recorded exceptions. This situation doesn't add up, based on this information. Perhaps the seller really IS qualified to sign the closing papers, and has decided not to sell! The title company is in position to know the true story!
Associate Broker, ABR,GRI,CRS,CRB
John L. Scott
FIrst, I agree with Patrick, you will be well served to speak with a Real Estate Attorney. I would direct them to the Sellers Disclosure Statement where the question is plainly asked, "Do you have legal authority to sell the property? If not, please explain."
If they said, "Yes", you are entitled to some relief. The problem however is according to what you have told us, the seller is behind on payments and has financial difficulties. This doesn't excuse their behavior, but it may mean collecting any damages may be difficult. Your agent may want to contact the selling agent's Broker to discuss this situation as well.
Your loan officer and their title agent should have discovered this earlier when dong a title search or payoff request. I always start of with check the title and try to get the payoff early on in the process for this very reason amongst others. Needless to say I've uncovered some potential headaches early on doing things that way.
Let me know if I can be of help in your next purchase!
Eagle Nationwide Mortgage Thomas.Stevens@ENMCdirect.com
I would ask as many questions as you can think of via email (documentation) to your agent as to what was said to him/her and when. And get your agent to do the same thing with the seller's agent via email. Then meet with an attorney (or two) to see if they can help.
Sorry this happened to you but there may still be hope - best of luck.
Please keep us posted on how and what unfolds. Good luck to you.
Seller may not been up front with listing agent may not have known all particulars
Sales offer governs on how you can have earnest money returned or breach of contract by seller
Title company should have been aware of all this prior to close date . It could be matter of day sort all all this recommend contacting title company experts in resolving these issues.
I agree with Dan and Marcey. Your ernest money should be able to come back immediately from the escrow company. As to anything else, there are several issues and after a long conversation with your agent, you probably will want to consult with an attorney. Good luck to you and if your agent does not have an attorney to recommend to you, I would be happy to refer you to one.
I've read all the very good points here raised by agents around the country. Again - I agree, consult an attorney.
As for your earnest money, who was the check made payable to? In TN it would NOT be to the other contracting party (i.e. the seller) so the seller has never seen that money, it is held in a real estate company's escrow account. They can easily refund upon a release signed by the seller and yourself.
If the seller refuses to sign you may be able to sue for specific performance. Because the seller has never received and will never receive that money there's real no incentive to not sign and face a lawsuit rather than to sign and move on.
If the seller had a rock bottom price to prevent doing a short sale that should have been a warning sign that the seller may have been delinquent.
While it seems that the seller is in your words, "protected", in this scenario, they really aren't. They will still face repercussions from their own actions as well. However, I know that doesn't make you feel any better....
Step 1 to getting your earnest money back - find out who has it.
As to your earnest money, someone should be holding that, and I would think you would be entitled to it back as long as you were able to perform (again consult an attorney about that). I doubt the refund of that will be an issue. That is probably the bulk of your money, and it may not be worth suing for the balance.
Finally, your agent is most likely owed a commission by the listing agent. IMHO, he/she should pursue that on these facts.
As explained, this is a most distressing situation....With situations like this there is almost always more to the story...........This additional information can change things greatly!
To get to the bottom of this, we would also jump on board with those who have expressed your need to refer this to an attorney for their input.
If you signed Buyer's Agent agreement before you got into this, your Agent would be legally responsible for disclosing any knowledge about the transaction before such mess can occurs and, typically, when you do have a real Buyer's Agent this does not happen!
If you hired a Real Estate Attorney before you signed the documents, you should question your attorney what he/she has done to protect you and what will they do to recover your money? If that does not work consult with your local Bar Association on how to go about clearing this mess up.
Typically, when the transaction can not close due to the Seller's failure, than all of of the Buyer's deposits shall be prompty refunded. The money spent on inspection, typically, are not refunded.
My advice to any real estate buyers to avoid any possible mishaps: always have a Buyer's Agent agreement before moving forward with any Offer and always hire an Attorney to work on your transaction! Both are responsible to represent your interests and not the Sellers.
If you were represented by another Realtor, I would make sure your Realtor's Broker knows what has happened.
If you cannot get results or satisfaction, then small claims court is an option that would not require you to spend additional money on an attorney. Make sure you have as much written documentation, dates, and specifics in writing. If you make calls to these parties, take notes, write down who you talk to, what they say, etc. Document, document, document. It is very unfortunate that you have had such a negative experience.