Home Selling in 77339>Question Details

Frances, Both Buyer and Seller in Houston, TX

I just sold my house. We had the closing but the buyer's lender was very slow to fund the loan. The buyer's

Asked by Frances, Houston, TX Fri Jun 6, 2008

agent gave them the keys knowing the loan had not been funded and wouldn't be for at least 24 hours. They went in and painted the house before the loan had been funded. Can / should I file a complaint against thier real estate agent?

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Shame Shame on the responses that suggest this is "water under the bridge". Texas is a deed state, which means, the Buyers are holders (owners) of the deed after funding versus other states where the bank os the owner until the mortgage is paid in full. This being said, I suggest out of state Realtors need to understand Texas Law and ramifications for not following the law that protects the buyers and sellers.

Buyer's agent took a HUGE chance in exposing the Seller to major financial exposure if the home had been burglarized, an accident occurred while painting was being done or God forbid, a fire or storm damage.

Is reporting this individual something Mr. Seller should pursue? ABSOLUTELY! I follow the law and have experienced having to put movers on hold and get a hotel when my Friday afternoon funding did not take place until Monday morning. And, the Seller's agent GAVE ME THE KEYS! I was not in real estate then and as a matter of fact, it was first home. It is what it is folks, the law is clear on this subject and I prefer Frances to protect the integrity of my profession by filing the complaint.

Thank you for sharing Frances!

Web Reference: http://webuyitwesellit.com
3 votes Thank Flag Link Sat Jun 7, 2008
I disagree with the other posts.
Let me ask you this: How would you feel if this agent did this toa friend of yours?

Unless you do something they probably will. My suggestion is to write a letter to the agent's broker and explain the situation. I don't think that there are monetary damages, however, if you don't say something, it will probably happen again.

If you do not hear a response from the broker, then I would consider filing a greivance with either the department of Real estate OR the local association of REaltors.

One more thing...who gave the Realtor the keys?
Normally in a real estate transaction the transfer of the deed does not record until the loan funds. I don't know what Texas law is about, but talk also with YOUR Realtor.
2 votes Thank Flag Link Fri Jun 6, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
Hi Francis. Yes, there was a mistake made. Keys should not have been released to the buyer until the funding was cleared by the lender and funds were received at the title company. Legally, the seller is responsible for the property's condition until the funding occurs. Often however, the listing agent will leave the keys at the title company or give them to the buyer's agent for convenience of transfer once the loan is funded. While this may be "convenient" for all parties, some agents release the keys too early either because they mistakingly believe that funding will occur that day or because they don't consider the full risk involved in giving the buyer possession of the property prior to funding.

As to whether or not you should file a complaint? Since the property closed and funded, I wouldn't necessarily file a formal complaint, but should you decide to do so, you'll want to file it with the Texas Real Estate Commission at http://www.trec.state.tx.us.

However, I would recommend at writing a letter to the agents involved to express your dissatisfaction with their actions. Many people believe "no harm, no foul" and won't think twice about repeating the same actions again unless they are told that what they are doing is wrong. Hopefully this is the first and the last time that the agents will release keys prior to funding.

Best Wishes
Web Reference: http://www.mynewhomenow.com
2 votes Thank Flag Link Fri Jun 6, 2008
The listing agent, should not have turned over the keys to the property until the transaction had been closed and funded. Until the propery has been closed and funded, the liability for the property is the sellers . You can file a complaint against the buyers real estate agent or just let it go and learn from your troubles.
2 votes Thank Flag Link Fri Jun 6, 2008
Your agent, the listing agent, should not have turned over the keys to the property until the transaction had been closed and funded. Until the propery has been closed and funded, the liability for the property falls squarely upon the sellers shoulders. You can file a complaint against the buyers real estate agent, but if the transaction has now been closed and funded, I think you need to ask yourself if its worth your time. If you feel strongly about it, then go ahead and file a complaint with the Texas Real Estate Commission.
Web Reference: http://www.jillwente.com
2 votes Thank Flag Link Fri Jun 6, 2008
The buyer's agent shouldn't have given the buyer access until the lender has funded and title has dispersed the funds. Although, you as the seller, have the digression of giving the buyers permission to access the home...knowing you are at the finish line. Whether you choose to look the other way or file a complaint against the agent is again your decision to make.
1 vote Thank Flag Link Sun Dec 14, 2014
Facts: A closing doesn't mean the loan is a done deal. And a funding number does NOT guarantee the deal is done...... I have seen deals where the funding number was issued and the loan didn't close or was delayed because the closer spotted something the underwriter missed. I am not going to go into all of the reasons or specifics of why these things happen.... Just know that they do happen. A good realtor would know this.
But know that YOU are liable for whatever happens to or whatever happens on the property until the funds are issued!!! Period.
TREC doesn't have time to look into every complaint? I bet if they had more than one small complaint on the same realtor.... they would look into it!!!

Save others from this bad realtor!!!
File a complaint!!!
1 vote Thank Flag Link Wed Sep 9, 2009
The realtors actions were inappropriate. Definately file a complaint. Maybe the next seller won't be exposed to the same liability that you were.
1 vote Thank Flag Link Sat Aug 2, 2008
Frances ,
If I may take this chance to interrupt your question with a note to buyers , sellers and agents. Just because of problems like this I , and a lot of seasoned agents in Texas, leave Fri. closings to Cash sales.
I do not know if this was a Fri. closing but most of us know Fri closings do not go smoothly, if and when they close they seldom fund. I have had many a buyer left stranded.
And Lucy was right , with out a buyers tempory lease no one shoud have been in this home.
What if this was the one time in 10000 that the lender did not fund, something was wrong with the paperwork.
What if, as Lucy stated, the paint spilled, they put newspapers all over , started crying, drinking beer and smoking and the house burned down with them in it.
Boy there can be some what if's.

1 vote Thank Flag Link Sun Jun 8, 2008
You could, but if it all worked out, I would move on. There are better things to worry about. It's not smart of the agent to give a prepossession but that's their deal, they are liable for that.
Web Reference: http://getprequalified.com
1 vote Thank Flag Link Sat Jun 7, 2008

Thank you for your decision...and for helping to make this industry adhere to the professional standards that are in place to protect Buyers and Sellers...and to hopefully help real estate agents better understand and appreciate their responsibilities to their clients.

Alan Wynn - Realtor
Like NO ONE Else!
1 vote Thank Flag Link Sat Jun 7, 2008

The attitudes that I read in some of these posts...no harm - no foul, let sleeping dogs lie, pick and choose your battles in life, etc...are exactly why things like this happen to Buyers and Sellers in the first place. Who gave the keys to who and when really doesn't matter...there is no clear cut procedure for this anyway. But what does matter is that you as the Seller were put into an extremely dangerous situation.

Until the Buyers loan is funded, you as the Seller have complete and 100% responsibility for the property. That is one reason you don't cancel your homeowners insurance until after the actual funding date. If the Buyer had caused accidental damage to the property...like a fire...or had fallen off of a ladder and injured themselves or the keys had gotten into someone elses hands and the property was vandalized...any number of things...you as the Seller would have been responsible. I am sure you know all of this already. And fortunately you were luck and none of this happened.

But here's the thing...

If you do not do anything about what happened, this sort of unprofessional behavior will continue and the next time it happens, the Seller may not be so lucky. Our business is one of professional standards. And to take such a casual attitude towards it as I have read in these posts is one reason we as real estate agents are not respected as we should be.

The Texas Real Estate Commission has a procedure for filing complains against the real estate community for issues just like this. The procedure was put in place for a reason...so that we can stop these kinds of things from happening again. And sometimes, TREC may even create a standard to cover this sort of situation if they feel it is important enough. But if they don't hear about it...not much they can do.

Our Code of Ethics states that it is our responsibility as agents to our clients to protect and provide for their best interests. My opinion...I don't see that this was done in your case. And I believe the real issue is...were you represented properly by your agent.? If you don't at least file a complaint, you are doing the real estate industry a disservice. To me, this was not a minor issue...it could have turned out quite badly

As you can see, I feel very strongly about these kinds of issues. And only you and the many other Buyers and Sellers that these types of things happen to can help us in clean up this industry. Too many agents take a much too casual approach on how they do business and in the end it usually affects their clients.

Again, this is my opinion but you are in a position here to make a difference.

Best regards.

Alan Wynn - Realtor
Like NO ONE Else!
1 vote Thank Flag Link Sat Jun 7, 2008
As you can see, the consensus surely is that the buyer's agent should not have released the keys to the buyers until their loan actually funded. You can't wait for the recording, because, depending upon where you are, that can take time. The seller hasn't sold the house until the money changes hands...FUNDED!
The real problem here is who gave the buyer's agent the keys to the home? The buying side of the transaction should have access to the house for a final walk-thru, but not retain possession of keys until the actual closing. If your realtor gave the buyer's agent the keys, that was a mistake as well -- or if the title agent was not given explicit instructions when to hand out keys, that is a mistake on the listing agent's side as well.
I am the Professional Standards chairman for our Board of Realtors, and I am not sure this case would be forwarded to us for a hearing, if it were filed, because there does need to be more clarification. As tough as this is, now you know how critical it is to have all procedures clearly spelled out in advance. If it is any consolation, however, the buyer's most likely would have been liable, if the coverage date for insurance, the actual date of closing on the bank's loan papers, and all the documents still read the actual date of closing, not the funding date. That means if something happened to damage the property, they would have been the"constructive" owners and therefore, liable. I am not an attorney, but procedurally, in closings, that is the case.
Hope this helps.
Carol Wilsey, Broker-Owner
Exceptional Properties of SW Florida
1 vote Thank Flag Link Sat Jun 7, 2008
Hi Frances:

No, they should not touch your house until the loan is funded and the title is recorded to under their name.

We do not hand over keys to either buyers agent nor buyers before close of escrow. What happens if there was problem with funding and somehow the buyers can't get the loan at the last minute (change jobs? Lenders closing - we heard that a few times last year), or if whatever they do caused damage to the house/?

That's just not the right thing to do. I assume you close escrow with no further incidents, but I think you are justified to file a complaint against either your agent or the buyers agent (whoever allows them to do so) if you want to, or you should at least let the broker know how inappropriate that is.

1 vote Thank Flag Link Sat Jun 7, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
Sorry typo. " recordation of deed ". Though loan is funded. But if not recorded. No key release. As seller still owns the property.
0 votes Thank Flag Link Thu Dec 20, 2012
Well folks. I am in sf ca. Been in real estate since 1984. I see many reader state " till funded or funds received by title ". Well. We go wi "record action of deed ".
0 votes Thank Flag Link Thu Dec 20, 2012
The first question that is going to be asked when you file that compliant is " How did their agent get the keys?" The reason for this question is that their agent was not to of had the keys until closing and funding either. As stated by Carol Ann it is your agent that was in the wrong or the Title company..Quite often they are left with the Title company until closing if the seller has signed.
The buyers agent represents the buyer, the Listing agent represents the seller
I hope this clears up some of your questions, a compliant will also be a compliant against our agent

0 votes Thank Flag Link Thu Sep 10, 2009
TREC is far to busy to look at every complaint especially one like this. I am sure there are sides to every story. If in fact a funding number has been assigned and you have in writing the loan has been approved just waiting on a wire you can technically give the keys. Many new home builders do this all the time. I am sure if it were illegal they would not provide access to home. TREC looks at the entire situation. But you probably are better off just calling the broker if you feel a need to get it off your chest. Keep in mind the agents are probably doing their best and with the laws so diffcult to interpret I would let it go.
0 votes Thank Flag Link Wed Sep 9, 2009
Frances, I TOO can't believe some of the response that have been given here BY REALTORS! I hole heartedly agree with those telling you to file a complaint. TREC is there for just such things as this, to police inappropriate activities by real estate professionals. I don't care HOW MINUTE they may seem. If one transgression gets by, that agent may think they can get by with this or something else a little bigger the next time. If it was a new agent and they didn't know any better, then better for them to learn on a smaller level than to have something even more serious happen in the future.
I applaud you for going through with your complaint filing and SHAME ON YOU agents that advised otherwise. It would almost make me think, if I were a Mr. or Mrs. J Public, that you may be some of the very ones that didn't take special precautions that this type of thing DIDN'T occur on your watch.
Just my opinion and I'm sorry if I offended anyone but we have to watch out how the public preceives our practices. I value my license as I am sure you all do.
0 votes Thank Flag Link Sat Aug 2, 2008
I don't think I understand. How did the "buyers agent" have the keys to begin with? Were you not at the closing in person? The seller is still legally liable until funding. I think your agent was just as much at fault.
0 votes Thank Flag Link Sat Aug 2, 2008
My question would be why did the buyer's agent give them the keys? The keys should have been in your possession or your agent's possession before funding. Those were your keys until funding. That's just my 2 cents.

Carol Pease
0 votes Thank Flag Link Sat Aug 2, 2008
Frances, did you get your money? If so, go spend some and don't worry about it. If it still keeps you up at night after pampering yourself with a day at the spa, then call his broker and vent some grief. I would hate to have you go all the way to the board of realtors, complain, and have to come back in a few months for a hearing. If anything, why don't you yelp about it at yelp.com. Tell everyone your experience and who they were with. Cheers.
0 votes Thank Flag Link Mon Jun 9, 2008
I hate to see everyone run to the board or TREC with out knowing all the "W's".
I would call the agents Broker and file a complaint.
0 votes Thank Flag Link Sun Jun 8, 2008
If the parties had been aware that the loan would not fund that day, a temporary lease could have been executed for that one day which would have clarified the liability issue.

I personally would not pursue the matter further. The buyers were obviously thrilled to be the new owners and anxious to get into the house. Many sellers would not have an issue with the buyers getting into the house on faith that the funding would occur. You happen to be one who did.

Check with your agent first to make sure he/she didn't receive a call asking, "Do you think your seller would mind if the buyer's have the keys tonight since we know the funding will occur tomorrow?" The agent could have given the buyer's agent the go ahead thinking it wouldn't be a big deal to you.
0 votes Thank Flag Link Sat Jun 7, 2008
Hi Frances,

Great question. I have two questions for you - Has the laon funded yet? If so then there should really not be a problem and you might (through your agnet) be able to charge rent for one day or however many days the bueyr had occupied the house prior to funding. The second question is how did the buyer agent get access to the keys? You really need to talk to your realtor and if you think the buyer agent acted wrongly then you can visit the Texas Real Estate Commission and file a complaint against him/her.

I don't know the complete story but (acting as the devils advocate if you allow me to) the buyer agent could have had a good reason to do give the the key or open the hosue for them (i.e. bueyr's did not have a place to spend the night).

Hope this helps.

Juan Carlos
Web Reference: http://www.har.com/jch
0 votes Thank Flag Link Sat Jun 7, 2008
Thank you all for your answers, I really appreciate the advise and will be filing a complaint on Monday. Have a nice weekend, I hope you sell some houses!!
0 votes Thank Flag Link Sat Jun 7, 2008
I have too agree with Bruce & Jill, pick and choose your battles in life if you have the time, go ahead, other than you have received your money just move on. Next time you sell a home just confirm with the title company the keys will not be released till funding which is normal standard practice. However how did the buyers agent obtain the keys? thru the listing agent who represented you? or the title company, most title companies DO NOT RELEASE the keys till funding. You may have an issue with your own agent who you gave the keys to?

0 votes Thank Flag Link Fri Jun 6, 2008
Did you get your money?......if so....let sleeping dogs lie and don't loose any sleep over it. In the end that's really what counts isn't it? Was it a good practice? NO. Would you like the title co to hold on to the keys next time? YES. Could there have been a problem if it didn't fund and you got the house back? YES (If they painted a color you didn't like or wouldn't have enhanced the sale.) Is it something to get bent out of shape about now? NO.
0 votes Thank Flag Link Fri Jun 6, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
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