Question Details

Sara, Both Buyer and Seller in

Can our house be an "active" listing in MLS, if we are technically under contract? We accepted

Asked by Sara, Thu May 29, 2008

an offer in April, received the earnest money, and 2 weeks later, the buyers notified us that they wanted to terminate the contract because the repairs deemed necessary by their inspector exceeded the $5000 cost-to-repair contingency. However, it has come to light that the inspector's report was totally flawed, which he has even admitted. We have had a specialist perform another inspection, who has deemed the house to be in perfect condition. The buyers have been presented this information and still want out, for no discernable reason. Both parties are refusing to release the earnest money and have hired attorneys to hash this out. In the meantime, our house has been listed in MLS as "accepting backup offers" for almost two months, which means in this over-saturated market, we're not getting any lookers. Can we return it to an active status? Our attorney says he believes we can, but our realtor is cautioning us against it for fear that we could enter into a second contract. HELP!

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11
Yes, yes, yes ... I totally see where you all are coming from. Our #1 goal is, obviously, to sell our house. What started this whole legal ball rolling was the hope that the buyers would reconsider, given the new information from the third-party inspector and the potential of losing out $5,000 in earnest money. (For what it's worth, we actually weren't the ones who hired the specialist or paid him; our builder did, to prove that their construction is faultless.) I guess what's burning us up is that our house is TOTALLY fine (realizing that no house, even brand-new, is "perfect".) I just have to wonder why there are contracts and earnest monies at all, if we sellers are to just roll over and let buyers out of them for no reason. I know we cannot force someone to purchase a house, but we can certainly force them out of their earnest money for changing their minds for no reason. Believe me, had we known two months ago that this is how it would all turn out, we would have let them out of the contract and been on our merry way. Now that we're this far down the legal path, it's foolish to turn around (especially since we'll be out legal fees.) Hence my question ...
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Sara, I know how disappointing it is to think your house is SOLD and it isn't, but if you can, for a minute, put yourself in the buyers shoes. You have an emotional attachment to your house and they don't. When you do out and look for a new house it may become clearer, but you cannot force someone to buy something by holding their money hostage. It makes an adversarial situation even more adversarial. Move on like we do--- "NEXT!".
2 votes Thank Flag Link Fri May 30, 2008
did your potential buyers purchase an option period from you? If so, and they decided against it, then, well in Texas, you return the Earnest money and put your home back on the market. The option period gives the potential buyer as certain amount of days to decide if they want to buy your home, based on inspections, or not. They loose this option period money, it goes to you, if they opt out of buying your home. Hope this helps your situation.
Web Reference: http://www.fabailey.com
1 vote Thank Flag Link Thu May 29, 2008
I agree with Chris Freeman, Sara.

As a casual observer, it sounds like if you released the earnest money deposit, you could get on with selling your house. Just because your inspector says the home is perfect, well... he is not exactly an unbiased party, is he? If buyers had to use inspectors designated by the sellers, there would be a lot of inspections reporting homes in "perfect condition!" This is off-topic and not really your question though.

On your specific issue - you're paying for an attorney already - follow his advice. It is probably more reliable than asking your question in an online forum where most of the experts are constrained from giving you legal advice on what is at its essence a legal question.
1 vote Thank Flag Link Thu May 29, 2008
Chris, I wish I could give you 2 thumbs up for that answer.
1 vote Thank Flag Link Thu May 29, 2008
no worries - i don't take it as you picking on me. :) i just can't understand why legal contracts are drawn up that willing parties sign, if they can be nullified for no good reason. guess i'm from the camp that believes that people should be held accountable. "letting them off the hook" simply seems out of the question. we have now ascertained that we can get it back to full-active status while at the same time hashing all of this out in court. the only way we could potentially have a problem is if we get another offer while we're still under contract with these people who don't want the house. and the only way that's going to get troublesome is if these unreasonable buyers suddenly decide they DO want the house. which is not a bad problem to have -- given the alternative.
0 votes Thank Flag Link Mon Jun 2, 2008
"For what it's worth, we actually weren't the ones who hired the specialist or paid him; our builder did, to prove that their construction is faultless."
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I just want to point out that the fact that it is the BUILDER's inspector makes the report even more biased. Of course the builder is going to furnish a report stating that its construction was faultless! I've never known a builder to do otherwise.

Sorry, Sara, to keep picking on you. I do hope it all works out for you in the end.
0 votes Thank Flag Link Sat May 31, 2008
Sarah
(this is not legal advice). if the buyers do an inspection, and they don't want to buy the house, and the have not released their contingencies, then, pending any other significant evidence, I think I would have cut them loose with their earnest money. Having this drag on for two months makes no sense to me.
You can put it back on the market "subject to cancellation of previous escrow" in our MLS. You cannot OPEN a new exscrow until this one is cancelled by all parites in writing.

Focus on selling the house, not the earnest money. Get the buyes to write a letter acknowledging the first inspection was flawed and to agree to take responsibilitiy for it. Any inspection made now becomes a disclosure issue. (you have to tell all the other buyers about it and give them a copy...The good and the bad.
0 votes Thank Flag Link Thu May 29, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Yes, yes, yes ... I totally see where you all are coming from. Our #1 goal is, obviously, to sell our house. What started this whole legal ball rolling was the hope that the buyers would reconsider, given the new information from the third-party inspector and the potential of losing out $5,000 in earnest money. (For what it's worth, we actually weren't the ones who hired the specialist or paid him; our builder did, to prove that their construction is faultless.) I guess what's burning us up is that our house is TOTALLY fine (realizing that no house, even brand-new, is "perfect".) I just have to wonder why there are contracts and earnest monies at all, if we sellers are to just roll over and let buyers out of them for no reason. I know we cannot force someone to purchase a house, but we can certainly force them out of their earnest money for changing their minds for no reason. Believe me, had we known two months ago that this is how it would all turn out, we would have let them out of the contract and been on our merry way. Now that we're this far down the legal path, it's foolish to turn around (especially since we'll be out legal fees.) Hence my question ...
0 votes Thank Flag Link Thu May 29, 2008
Hi Bill ~ Thanks for your response. I'm still confused; our attorney is the one who seems to think it would be fine to return it to active status. (He is EXTREMELY difficult to get in touch with, or I'd ask him these questions myself.) I guess I'm not sure what the potential problems could be. If we do accept another offer, how could that be a problem, since the original buyers (in the dispute with us) don't want the house? (Unfortunately, we don't have that in writing.) Can they sue us for entering into a second contract, even if they don't want to buy it?
0 votes Thank Flag Link Thu May 29, 2008
The MLS has several Status designations. Active would be still available and not under contract. STI (Subject to Inspection) would mean an offer has been accepted, but is still subject to Inspection issues to be resolved by Seller & Buyer. Pending means the offer has been accepted and the Inspection Issues, if any, have been addressed. Sold would hopefully be your next Status.
0 votes Thank Flag Link Thu May 29, 2008
Sara,
Listen to the attorney....he has hit the nail on the head. Until your situation is resolved, "once and for all" changing anything may be inviting additional problems.

Good luck,
0 votes Thank Flag Link Thu May 29, 2008
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