Is an "underhanded deal" made after binder is signed (by both buyer and seller) legally binding?

Asked by Monika, New York, NY Sat May 25, 2013

Need advice!!! I put an offer in on a home verbally and seller accepted verbally. I then went in to the real estate agents office, signed official offer aka "binder". It had been scanned and emailed to seller. Buyer and seller are using a dual agent. Seller signed the binder and returned it to the agent. A few days later a second buyer had presented himself. His agent had written an offer directly to the seller via email. Seller accepted the higher offer without letting real estate company aware that she had been negotiating outside of her contract with her listing agent. I'm being told that our signatures on the binder are not legally binding until we go into contract, so the seller has the right to create a new binder with the 2nd buyer. Something sounds wrong about what's happened! Can this seller be sued for doing an "underhanded deal" without notifying realtor and me (the 1st buyer)?????

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John Sacktig, Agent, New Jersey, NJ
Sat May 25, 2013
Monika,

Next time, Just get an attorney involved faster than what you recently went through. That is the main point. As Robert notes "Next time you know that a binder is worth only the piece of paper it's printed on."

Exactly.

This other stuff of people talking about dual agency ( which is what you were in) and another agent that is clueless of what dual agency is, has absolutely no bearing here in this transaction since the new buyer and agent went directly to the seller and made a deal. That is all it is.. the seller never even informed the listing agent until after the deal was made. All the other stuff people try to say about buyer agent this and that is irrelevant. There is absolutely nothing wrong with dual agency.

Also as noted by Robert.. the term "highest and best" is a bunch of baloney too... it means NOTHING. It is just a term and process used by realtors to bring about a supposed resolution.. but MONEY TALKS. Same as your case... Someone says highest and best.. wait until it is over and say.. I will give $2000. more than the highest and best.. that ends that. Highest and best is a bunch of baloney.

Buying your new home should be an exciting and rewarding experience and in most cases it usually is... sometimes though.. woo, they can get tough for everyone involved.

You want this house.. make a higher offer. If not, move on an learn from the experience.
1 vote
Janet Nation,…, Agent, Baldwin, NY
Sat May 25, 2013
Since you have that form in your possession with both signatures go speak with an attorney, clearly that's what you want to do so why listen to us.

I want to also point out you that you mentioned dual agent. Unless you have a buyer broker agreement with the listing agent (and it doesn't sound like you did) there is no dual agency, that agent is working for the seller only, you have no representation. What consequences, if any, lies ahead between the listing agent and the seller is a separate matter.

Personally I would try not to get to agonize about this. The house is a material thing that you don't own and did not experience any out of pocket expense fortunately just a broken heart. Find another house with your own agent this time that can help you navigate around the sometimes daunting experience of purchasing a home. I wish you well:-)
1 vote
John Sacktig, Agent, New Jersey, NJ
Sat May 25, 2013
This is a financial transaction and until an attorney makes the deal a deal and you are under contract, it is all fair game, money talks. The dual agent thing has nothing to do with this. The other agent brought in a buyer that is motivated and simply wants the house. Sounds like you were not in contract.

What would you sue for? Are you looking to be compensated for being beat out on the house by a motivated buyer?

How did that buyer get the seller email address? Who knows. The seller can look at offers that come in and talk to anyone until the contract is drawn up. You have the right to match or beat that offer before it goes to contract.. how much do you want the house?
1 vote
Anna M Brocco, Agent, Williston Park, NY
Sat May 25, 2013
You really should be asking your attorney the questions, he/she can better advise....
1 vote
Marie Souza…, Agent, Centerville, MA
Sat May 25, 2013
Time to talk to a Real Estate Attorney....
1 vote
luzreyes2009, Home Buyer, New York, NY
Sun Aug 24, 2014
How long does a seller have to answer on a binder? Buyer made an offer signed the agreement, but seller has not responded.
0 votes
Marie Souza…, Agent, Centerville, MA
Fri Dec 6, 2013
How did you make out on the above? Give us an update!
0 votes
Rich Golio,…, Agent, White Plains, NY
Tue May 28, 2013
Monika,
Unfortunately I have to tell you that the signed Binder is not going to create any type of contractual obligation w/ the Seller.
However immoral the behavior is, moral and legal are very different things.
I try to tell my agents and clients all the time, No deal is done until the Sellers have signed the contract.
You can sign a contract and issue a very large down payment check, yet until the Seller's sign that contract and cash that check, anything can happen.
You don't have an actionable cause.
Feel free to call me if you'd like to discuss further 914-304-4320.
I wish you luck on your continued search.
0 votes
Christopher…, Agent, Tarrytown, NY
Sun May 26, 2013
Hi, speak directly with an attorney as they are the only one that should give you legal advice. As agents, we have to be careful extending beyond the scope of our duties. Good luck!

Chris
0 votes
Robert T, Home Buyer, Flushing, Queens, NY
Sat May 25, 2013
Monika, as another buyer who experienced the same thing as you, I sympathize with you. I won "highest and best", but another broker in my agent's office overheard what our price was, and told his client who submitted a higher offer. I was out of the running and I was going to sue everyone. But Janet is also right. Find yourself a good attorney or find another home. Next time you know that a binder is worth only the piece of paper it's printed on.
0 votes
Joseph Hasti…, Agent, Bayside, NY
Sat May 25, 2013
Monika, you went into this with both eyes wide open and without the help of an experienced broker. You chose to believe that this one broker could properly represent you and his client/seller with a dual agency agreement. Now you're turning to the community you did without to try and find someone to back you up when you should be talking to your Attorney. Did you do without one of those also? Caveat emptor. Good luck to you.
0 votes
What the heck did this guy just say, try to say?
Flag Sat Nov 16, 2013
Tom Dawson, Agent, New York, NY
Sat May 25, 2013
Monika, from what I can understand it sounds like you made an offer on a property thru an agent that represented both you and the seller. If that's what it was, you don't have a contract to buy. Your agent could have taken offers from many people and presented them to the seller.
A contract for a purchase here in NYC is drawn up by an attorney. And until that is done and agreed to by buyer and seller, its all just talk.
You didn't make mention of being represented by an attorney. If you were, give him a call.
0 votes
Monika, Home Buyer, New York, NY
Sat May 25, 2013
Sellers attorney has also ALREADY signed this agreement.
0 votes
Monika, Home Buyer, New York, NY
Sat May 25, 2013
Seller and I signed what is called "Agreement for the Sale of Real Estate" which gives me, the buyer, the green light to initiate financing from the bank and property inspection. I'm thinking this is a situation that definitely needs to be reviewed by an attorney. I spoke with our dual agent, they were not aware that she was negotiating the sale of her home privately (this action on her behalf ALSO goes against the contract she made with the real estate company when they agreed to the listing).
0 votes
Janet Nation,…, Agent, Baldwin, NY
Sat May 25, 2013
There's a lot going here and somebody else can take the time to elaborate but if you are talking about the MLS Sales Agreement that both you and the seller signed (which is rare for the seller to sign) and you have a copy of it, you might have something there, if not you don't have a leg to stand on. In our market place both buyers and sellers can change their mind to move forward with a transaction unless a fully executed contract is in place and that is not what you had, you just had a binder/offer. It's ugly and unfortunate but that's just how it works in our market place. Next time get your own buyer representation, not that it would avoid this from happening but you would be better prepared and maybe better treated.
0 votes
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