Nanalala, Other/Just Looking in San Francisco, CA

Can Buyer sue Listing Agent and Seller due to Closing date delayed and wait time for 1st mortgage to approval 2nd mortgage payoff on $500 difference?

Asked by Nanalala, San Francisco, CA Wed Aug 17, 2011

1st lender approves 2nd lender payoff $500 less than what 2nd lender approves. Therefore, COE is delayed. Need time to request 1st lender to approve the different, at least two weeks.

Buyer's unhappy and want to sue due to COE delay. Buyer's ready to move in.

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Answers

52
Joe’s answer
Yes- you should take the time and energy to sue everybody involved. Sue everybody! That's the American way. I am sure hundreds of attorneys will be dying to help represent you with this very legitimate lawsuit. If they won't represent you, you can always sue them too. Or, in the unlikely scenario where you find an attorney to take this case, and they lose, you might be able to sue them as well. If anyone gives you bad advice on here, I recommend a lawsuit. Don't forget, you could always sue Trulia as well. And your service provider, who had the poor judgement to allow you on this site to begin with, is surely culpable. Actually, when you really think about it, your teachers in high school might be to blame as well, and could be potentially worthy of a suit. It's definitely worth pursuing all these options over $500 instead of just closing the deal and moving on with life.
7 votes Thank Flag Link Fri Aug 19, 2011
SHORT ANSEWER IS NO...IN ALMOST ALL REAL ESTATE CONTRACTS YOU AGREE TO GO TO MEDIATION FIRST BEFORE YOU CAN SUE ANYONE INVOLVED...SORRY JUST HANG IN THERE...
2 votes Thank Flag Link Mon Dec 5, 2011
If either of the Realtors were worth a darn, they would agree to take a $250/each pay cut and get the deal done. I can't stand it when I see transactions being held up for small amounts of money like this when the Buyer/Seller don't even need to ever hear about this kind of problem! If the Agents would just be ON IT and jump in as soon as they see the issue, the transaction would be DONE and Buyer/Seller would be happy. (And probably be more likely to refer them business in the future to give a ROI for the $250 it cost them)

Mr Credit
ESPN Radio San Diego
2 votes Thank Flag Link Mon Aug 22, 2011
NO! You would be much better off paying the $500 than hiring an attorney. The result would be faster and cheaper and you would get the required result.

Tap
2 votes Thank Flag Link Thu Aug 18, 2011
If the negotiations between the first and second lien holders is resulting in a $500.00 shortfall, the shortfall is the consequence of the bank’s actions, not the listing agent or the seller. From where I sit, your only recourse in a lawsuit would be to go after one of the banks. Good luck with that …

Or the buyer could bring a $500.00 contribution to escrow to make up the deficit for the second lender and get things closed. Happens all the time.

Welcome to the wonderful world of short sales.
.
2 votes Thank Flag Link Thu Aug 18, 2011
give them the 500 it will save everyone time and money
1 vote Thank Flag Link Sat Dec 17, 2011
too many individuals are on trulia asking if they can sue this person or that person. take a deep breath and calm down.
1 vote Thank Flag Link Fri Dec 9, 2011
Hi Home buyer,

Did you close your escrow. Sounds like there was no reason to sue. The delay was no fault of the seller or the realtor. These can be standard delays in a short sale. You should have been informed by your realtor that a short sale is not a normal buy or sale. These can and may take longer than a traditional escrow.

Call if you need help.
Best regards,

Lillie Missbrenner, Realtor
Better Homes and Garden Previously Prudential California Realty
Cell: 925-628-9100
1 vote Thank Flag Link Tue Dec 6, 2011
Listing Agent has nothing to do with this, they listed what was told to be a sale ready home. They would have advised the seller of what needed to be said and done had they known there factors involved in the sale. The Realtor would have disclosed to you any conditions they knew would affect the sale of the home or the time line of the contract! As a Realtor I often get hit with little problems that were not disclosed to me by the seller. My hands are tied in these matters. Remember it is not the responsibility of the Realtor to discover problems only to disclose them if they gain knowledge of them. With the help of a Real Estate Attorney you may go after the seller, but as far as what will be the out come, that is anyone's guess. As far as ready to move in, sorry for that frustration but at best here the result will most likely be the collapse of the sale and no sale will happen. If you want this house bad enough, please be patient and let it go through at what ever pace it is going. If the wait cost you money in the form of extra fees and interest payments, wait till the sale is final and then go after the seller to recoup those loses.
1 vote Thank Flag Link Thu Sep 29, 2011
Doesn't your buyer realize the property is probably worth half what it used to be and recognize the value? They should pay the $500 and close. Reality check!

David Barr, Broker Associate
Sandals Realty
941.870.0656 direct
david@davidbarrhomes.com
1 vote Thank Flag Link Wed Sep 28, 2011
Buyer can sue anyone they want, that's one of the problems in this country. However The Buyer doesn't have a case, will lose in court and hopefully the court will force them to pay the legal fees of the listing agent and Seller as well as all court costs.

Buyer needs to grow up and stop acting like a petulant child. Frankly if this is the biggest issue they had when buying a short sale they should be grateful. Most short slaes taxe months and most never close.
1 vote Thank Flag Link Wed Sep 28, 2011
$500? Sue? A short sale? HA HA HA!!! Yah gotta be kidding!!! Suck it up and pay it. It's peanuts, it's bubkas, it's squat. Or, just walk away.
1 vote Thank Flag Link Tue Sep 27, 2011
Seems to me that this small problem could have been taken care of by the real estate professionals involved and saved everyone a lot of time and aggrevation. The $500 could have easily been deducted from the comission in some way.
1 vote Thank Flag Link Wed Aug 24, 2011
Thumbs Up Joe!










.
1 vote Thank Flag Link Mon Aug 22, 2011
As a lawyer... and a realtor, I'd have to say I agree with my colleagues below. $500 isn't worth the time of a lawsuit. Filing fees for San Francisco Superior are nearly $500 and that's not to mention hourly rates many lawyers charge. No, you're better negotiating here. Besides, unless something horribly went wrong there's not too much that is atypical here. While you may be out of contract, unlike litigation where both parties are fundamentally opposed to each other (why else would you be in litigation but for a zero-sum game, right?) in real estate I've found that people actually want to work with each other. Last, you have to consider that you're likely subject to a mediation and/or arbitration clause barring access to the courts at least in the first instance.

Hope it worked out!

Best,

Kevin
1 vote Thank Flag Link Mon Aug 22, 2011
This is America. You can sue anyone for anything. But, do you really think you'll win? What will be the cost to find out?

Happy funding, Rudi
Web Reference: http://www.umboc.com
1 vote Thank Flag Link Sat Aug 20, 2011
Life is full of negotiations.

From my experience in short sales, a $500 difference is nothing. If you can't afford the $500, contact your agent and see if you can't work out a deal between all parties involved. Delaying a close by 2 weeks to get a further $500 concession from the bank(s) is inviting trouble.

I've seen lenders cancel their approval and simply let it go to foreclosure. Besides, a 2 week delay is undoubtedly going to cost someone additional money anyhow. If you've got a solid approval now, just close it and move on! Chalk it up to experience and a good story to tell over dinner. ;)
1 vote Thank Flag Link Thu Aug 18, 2011
Nanalala,
All of these answers are fantastic, but I'm going to have to agree with TAP, in that you should probably just suck up the $500. It will be much more cost effective for you in the long run. Consult an attorney if you want to take the legal question further but I think you can surmise by the tone of the answers that you're facing an uphill battle if you decide to sue. If the amount were more substantial things may be different, but $500 isn't a huge sum of money in the grand scheme of things......

Cheers and best of luck

Duncan
1 vote Thank Flag Link Thu Aug 18, 2011
Assuming this is a short sale, as pointed out below this is often part of the short sale process. We just had a deal blow up because at the last minute the lender wanted $6200 more to close the deal and the buyer walked. Buyer could pay and get it done, and although I'm not an attorney I can't imagine anyone taking such a case, much less winning it.
1 vote Thank Flag Link Thu Aug 18, 2011
The two lenders have a disagreement over what the pay outs should be. This is typical in short sales, nothing new. Why would you want to sue the listing agent and the seller? I'm sure they would like to see this transaction closed as much as you do.
1 vote Thank Flag Link Thu Aug 18, 2011
Hi Nanalala,

In every short sale that I have completed the purchase is subject to the condition "bank approval" both 1st and 2nd. Until this is agreed the lenders are not forced to cooperate and the seller can change tier mind. It also depends on the wording of the specific contract and/ or the approval letters.

Good luck.
0 votes Thank Flag Link Wed Jan 11, 2012
I would say that anyone can sue anyone. I have been sued but not because of my real estate carreer. Both times the frivolous lawsuits were dismissed. The agent and seller do not control the closing.
0 votes Thank Flag Link Wed Jan 11, 2012
First of all let me begin by saying that anyone can sue anyone else for anything. Whether or not they will win is another question. Our mortgage market is very tight and generally getting to closing is a struggle. Unfortunately, the seller and listing agent do not control the mortgage process.
0 votes Thank Flag Link Sat Dec 17, 2011
This is where the agents should step up, split the $500 and call it a day. Also, it should not take 2 weeks for a lender to approve anything.
0 votes Thank Flag Link Sat Dec 17, 2011
The answer is no. The delay in closing is not the fault of the Listing Agent or the Seller. These days, we are at the mercy of the Mortgage Company and patience is a virtue.
0 votes Thank Flag Link Sat Dec 17, 2011
Too many people in our society today want to sue when things don't go as planned. Unfortunately, things happen and as an experienced broker we do everything in our power to get a property closed on time because otherwise we don't get paid. I know I do everything in my power to get properties closed on time, but in the rare instance the property is not closed on time, I work through it with persistance and get it done. Therefore, I would not recommend suing, because I'll get it closed before an attorney could do anything for you, and it will just cost you money with the attorney.

Regards,
Roget Kuhn
Managing Broker
Aspen Snowmass Real Estate
http://www.ShowAspen.com
800-705-0180
roget@showaspen.com
0 votes Thank Flag Link Sun Dec 11, 2011
The answer is "no". The Buyer cannot sue the listing agent or seller if the closing date gets delayed through no fault of the agent or seller. All contracts need a closing date to be a valid contract. The reality is, however, that the date is often changed. Closings by Mail-Away are one example. Earlier closings often take place, upon agreement of both parties. Delay's happen when all does not go smoothly.
0 votes Thank Flag Link Sun Dec 11, 2011
Everyone has some great answers, Its a process hang in there because sometimes closing dates are not exact! Things go wrong and the agent is not at fault but look at the financing side.

Good luck and be patient!

Millie Valentin
RE/MAX VOYAGE
0 votes Thank Flag Link Fri Dec 9, 2011
Well being that most of the time the deal closes late it is the buyer, and many times the sellers do sue and win, I would say yes, but...

Life is too short to that kind of thing, the seller is probably doing the best they can, If I were either the buyer's or seller's agent on this, I would just pay the $500. Maybe the agents can go in 1/2 or something. Seems foolish to stop the deal over so little. But for heavens sakes, life is to short to sue someone over a delayed escrow. If it is messing up your schedual enough, lend the seller the $500 and let them pay you back, you may end up with a life long friend. You may lose the $500. It is not that much money.
0 votes Thank Flag Link Fri Dec 9, 2011
as long as the listing agent used some protective language to treat the various potential outcomes (and this is a common one) the seller can rest easy knowing that the buyer who makes a threat such as has not consulted an attorney who would advise that they have no grounds...PROBABLY.

if the agent did not craft the contract to treat such occurrences, it is possible that the buyer has some grounds. now all they need to do is get out the checkbook and hire a lawyer. most folks don't have the nuts to file a suit...or the money.

the best part is that they can be ASSURED of a sale if they pony up the $500. or they can spend $15,000 to save the $500. i assure you that the folks reading this ALL thought that there's no way in hell we are letting a deal go south over $500. it appears you have a couple of retards for agents...maybe even one of those who are proud to tell the world that they do not grant commission forgiveness.

this is an old question...can you let us know how it worked out?
0 votes Thank Flag Link Thu Dec 8, 2011
No, If the contract does not specifically indicate that both the 1st lender and 2nd lender need to coordinate COE then one cannont sue on this reason.
0 votes Thank Flag Link Thu Dec 8, 2011
Anybody can sue anybody. Weather or not you can win is another question.
0 votes Thank Flag Link Thu Dec 8, 2011
Buyer cannot sue the listing agent, simply because it is not the agents fault when lender drag their feet and cause delays.
0 votes Thank Flag Link Thu Dec 8, 2011
A person can sue anyone. The question is can that person win the lawsuit. Whey would you sue the listing agent if the issue has to do with the lenders?
0 votes Thank Flag Link Wed Dec 7, 2011
Hi,

The first lender is not requred to pay off the second loan at all.

Like previous post any one can sue but having the "Elements of a Cause of Action necessary to state a claim" is why most law suites get dismissed.

Also, the buyer was most likely mad, this type of thing happens all of the time.

It is the lender they will have to sue unless this person pays an attorney a $2500 to $5000 retainer it most likely will go no where.

JoAnna Jensen
Web Reference: http://www.vololaw.com
0 votes Thank Flag Link Wed Dec 7, 2011
A suit can be filed, not sure it can be won. I'm not a lawyer, though any valid suit must show cause and damages. It seems challenging to identify any damages suffered by the buyer.

Good luck!
Web Reference: http://www.crowehomes.com
0 votes Thank Flag Link Wed Dec 7, 2011
No. Buyers cannot sue unless material facts were not disclosed.
0 votes Thank Flag Link Wed Dec 7, 2011
Purchase agreement should have addendum stating that transaction is contingent on both 1st and 2nd lien holders approval and subject to sellers acceptance of all final terms and conditions of both short sale approvals. Meaning your not clear to close until all parties have come to agreement, including 1st and 2nd lien holders.
Web Reference: http://www.cartergeer.com
0 votes Thank Flag Link Tue Dec 6, 2011
Did you sue everyone yet?
0 votes Thank Flag Link Sat Dec 3, 2011
I would hope your offer (or counter offer / addendum) said something like "contingent upon short sale approval by third party creditor's". If not, they could in fact be in breach of contract. Many Realtors might "assume" that this clause in the contract since those of us that deal with this process on a daily basis know the perils of a short sale. We know they make our tempers and patience short - hence the industry definition of "short sales". If your sale was a private sale, no one could have thought to include this clause and therefore the results could be different.

I am not an attorney and this should not be taken as legal advice (since I don't want to get sued).
0 votes Thank Flag Link Thu Sep 29, 2011
Nanalala -

There should have been disclaimer's in place prior to executing the sales contract therefore consult with the disclaimers and your agent.

I am not an attorney and not giving legal advice just possible scenarios.

That in mind, "sue" is a last resort that involves attorneys and now you are talking about thousands of dollars of court fees, or a small claims court of hundreds. Either way, it serves no purpose for either party. They can "sue for specific performance" if the disclosure is not in place but the time frame will possible be beyond the closing date making that a moot point. Just simply ask for an extension since this is out of your control. Most likely they will accept the request (if they still want the house) or they will terminate and you owe them their earnest money. IMHO that is the most likely scenario.

Cathy Bureau
GREEN Home Realty
0 votes Thank Flag Link Thu Sep 29, 2011
It will certainly get tossed. Every one involved understand it is NOT a sure thing. You signed short sale two pages answering your concerns and you claimed you understood that! Go back read the offer contract. The lenders typ have a back up offer and can cancel 1st offer on short notice and sell to the other party.
0 votes Thank Flag Link Wed Sep 28, 2011
Welcome to the world of short sales. If the homes a great deal don't sweat the small stuff.

Short sales are not for the impatient or easily agrivated home buyer.
0 votes Thank Flag Link Tue Sep 27, 2011
From your description this is a short sale, the sale is probabily contingent upon the sellers lender(s) approving the short sale. You should have signed a short sale addendum as well. Unfortanately this is common place and part of a short sale, it does not give you the irght to sue. You are actually extremely LUCKY that it is only $500 with 2 lenders to deal with, usually it it is tens of thousands. It most cases if you really want the house, you can ask the listing broker, your agent and yourself to split it 3 ways if the seller has no money. Everyone shares equally and the sale can be completed. Dont be so quick to yell "SUE" or you will lose any chance of anyone helping you.

http://www.trulia.com/blog/scott_godzyk/2010/10/so_you_want_…

Please see my blog with tips and advice for buying a short sale
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Sep 27, 2011
Listing agent dropped the ball in not letting the buyers agent know about this before they got to this point. I have made it a practice to work with an attorney on all of my transactions to prevent these surprises. But the answers you have received are all on track. Sue if you feel justified but you can see it just isn't worth it. Sit down with both sides and get it resolved.

Good Luck to you all.
0 votes Thank Flag Link Sun Sep 25, 2011
Where is your Contract, did it specify the times for APPROVAL, ACCEPTANCE or CLOSING>

You undoubtedly were told, going in, that this was a long-term approach to buying a home, and that you will have NO CONTROL.

The answer to your questions, is, SURE, you can sue anyone over anything.
0 votes Thank Flag Link Wed Aug 24, 2011
I totally understand your frustration. in a short sale situations with more then one short sale lender. That happened all the time. for $500 to lose a good deal- that is not worth it! and you don't have a case in this short sale transaction or will cost you more to create one. for that amount...just pay off, get it closed and move forward with life. (You will end up happier that way)
0 votes Thank Flag Link Thu Aug 18, 2011
Why don't you ask them to share the cost with you? That is done all the time.

Best,
Sally
0 votes Thank Flag Link Thu Aug 18, 2011
Depends if seller is at fault for delay. Agent must breach their duties to be liable.
0 votes Thank Flag Link Thu Aug 18, 2011
Lawyers get paid if you win or loose so you could find some starving lawyer who would file a complaint and cash your check. I doubt you will win since you are buying a short sale and nothing is certain in a short sale. They can drag on and on with no end in site. I would give your chances to win in court about 5% but only if Judge Ito is still behind the bench.
0 votes Thank Flag Link Thu Aug 18, 2011
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