My contract got voided due to misleading and false information provided by the seller's realtor what are my options?

Asked by cuiw197, Gainesville, FL Sat Sep 22, 2012

I just had my purchase contract voided by the seller due to not providing proof of financing commitments within 30 days. I’m supposed to close next week at least that was the excuse they used because apparently the seller wanted to get out of the contract. I had originally asked my realtor to put more than 30 days because I was worried about the pace of the bank, but he apparently didn’t think it was important so left it at 30 and I didn’t see it in detail so I didn’t catch it. I’m at the 30 day mark, and I have it in written email from the bank that my loan was approved. Just need to finish signing some forms. We can target to close by Friday. I forward that email to both my and the seller’s realtor informing them that I got the loan and we are good to go on closing. Instead of getting positive feedback, I was asked again for proof of financing commitments and later the same night got a notice that the seller has voided the contract due to my non-compliance to the 30 day financi

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Scott Godzyk, Agent, Manchester, NH
Tue Sep 25, 2012
Most contracts do not call for ending the sale but ending your right to get the deposit back if your loan is denied. At this point have an attroney review your contract and advise you properly.
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Lisa Moroniak, Agent, Ashburn, VA
Sun Sep 23, 2012
Without being privvy to all the terms and conditions of your contract all of us here are limited in the opinions we're able to offer. My knee-jerk reaction is that the other party (as you mentioned) wants "out" for some reason, and they're leveraging terms favorable to them to do that. In my experience if two parties are working toward the same goal, a deal is always salvageable.

There are 2 phases to the financing process: 1) Loan Commitment and 2) Clear to Close. If you are able to furnish a loan commitment letter (even with conditions) this is typically acceptable to a seller until your loan is fully approved by underwriting.

Read your contract - do you have 3 days to provide loan commitment after receiving notice from the seller?

Escalate this to your agent's broker immediately for a 2nd opinion.

All my best,

Lisa Moroniak | REALTOR® | Service360°
SFR - Short Sale & Foreclosure Certified
Keller Williams Realty
Phone: 703-635-0388
Licensed in VA
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Thank you Lisa, i did get the loan commitment, and it was within the period, they had used the 3 day clause to get out of the contract. during that 3 days, I forward them the notice I had received from the bank which stated the commitment. but they then came back the morning of the 3rd say asking for a more formal letter, My bank couldn't get it to me that day as my lender agent was out and said she will get it to me on monday.
Flag Sun Sep 23, 2012
Misty Mount, Agent, Yorktown, VA
Sun Sep 23, 2012
The job of an agent is to do what is in the best interest of THEIR client. We have very strict ethics laws and a good agent will follow those laws. Having said that YOUR agent should be working for you as the buyer who wants to buy the house. Call your agent and their broker and set up a meeting. Your agent should be explaining this to you.
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cuiw197, Other Pro, Gainesville, FL
Sun Sep 23, 2012
Thank you all for the advice, to clarify a couple of things.
1. I had received a letter from the seller's realtor asking for confirmation for financing, and I provided them the email from my bank i had received stating I have formal approval. So i thought that would be enough.
2. I did not need an extension on the 30 day financing clause as I had completed my financing and my closing was for 60 days so I was actually planning to close this coming week (this all happened friday) around 33 - 34 days well ahead of the schedule
3. The seller was trying to back out on the deal for what ever reason, and the seller's realtor had accidently sent me a email that was also going to his agent saying "we might have a way out of the contract please prepare the void contract" that morning. (my contract was voided later that day) I tried to clarification through my realtor and even up to 10 min before we got the void contract notice, the seller's realtor was still telling us oh, our seller is just nervious about closing and want to make sure we can close on time. nothing to worry about.

I read through the realtor code of conduct and there is a lot about providing misleading communication / mis-representation. I feel that this was the case... is it not?
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Misty Mount, Agent, Yorktown, VA
Sun Sep 23, 2012
What did your agent say about the deadline? It sounds like the Seller may have gotten a better offer. However, if you want to move forward with closing, I would suggest a meeting with your agent and his/her broker to find out what your options are, its hard to say without more information. Is your closing with a lawyer? If so, give them a call as well. Good luck!

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Vivianne Rut…, , Fairfax County, VA
Sat Sep 22, 2012
As rigid as it may sound, but - fortunately - real estate transaction is guided by the contract law.
Legally, your seller had the right to ask you to remove the financing contingency as per contract terms.

This is why good old fashioned communication is the key - had you and your agent communicate more effectively, I'm sure the seller would have given you an extension.

I'm not a lawyer, but I do not think you can force the seller to agree to anything that is outside of the terms of the contract. It seems the seller asked at least TWICE for proof of financing. At this point, it is entirely up to the seller to agree to a delayed settlement - which most likely will cause a financial harm to the seller and an inconvenience - or void the contract and sell the property to someone else.

Unfortunately and fortunately, contract law at work :-)
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Dina Azzam, Agent, Ashburn, VA
Sat Sep 22, 2012
I am sure your agent wants to help. Make them contact their broker today. DO NOT wait till Monday, as every day counts. Good luck
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Sonal Goda, Agent, Reston, VA
Sat Sep 22, 2012
Hi cuiw197 - sorry you are having a difficult real estate transaction. If your contract is the regional contract from NVAR, you have three days after the notice to void from the seller to provide the financing commitment - read through the paragraph on the financing contingency. The loan officer needs to provide a document (not an e-mail) that says your loan is approved/loan commitment, and you need to deliver the contract form 100 to the listing agent/seller. Hopefully this would solve the problem.

However, you mentioned that you think the seller may not want to sell. If this is true - Matt raised some good points - it is worth finding out if there are conditions of the deal that the seller is not happy with and if there is a slightly modified agreement he would be happy with. However, if maybe they decided to stay in the house or something, then it may not be possible to purchase the house. I have heard of a situation like this where the buyers got awarded some damages b/c the seller breached the contract - but since seller didn't want to sell, buyers did not get the house.

I would like to emphasize that what you have is a legal question. So although I have read the paragraph and have heard stories, I am not an authority on this. In order to have the best result, you should consult a real estate attorney with the specifics of your situation. Your title company may have an attorney that you can speak with informally. If not, there are many title companies that have real estate attorneys.

Good Luck,
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Matt Elliott, Agent, Reston, VA
Sat Sep 22, 2012
Hello Culw197,

The best advice that can be given is to talk with a real estate attorney asap, assuming of course you would still like to close on the property.

There is a specific notice that you should deliver to the seller's agent (and seller, if needed) that essentially says "the purchaser hereby removes the financing contingency." You would want to sign that, along with any other purchasers listed on the contract. Typically speaking, an email from the lender - such as the one you forwarded - would not suffice, at least contractually. Your agent should have known this and communicated the formal financing contingency, along with any required lender documentation if the contract called for it, to the seller's agent.

I would advise the counsel of an attorney in this case, and I would also ask your agent to reach out to seller's agent to determine the real cause in the change of the seller's position to no longer want to sell this property under the terms you've already agreed. There could be an easy fix (such as the seller needing more time to close, or perhaps a slight increase in sale price) that you might be willing to offer that, although not originally requested by the seller, and perhaps contractually not necessary, it may also be another option vs. going the legal route, which may or may not ultimately be successful.

Good luck; if I can help further feel free to call or email. (Your agent should be giving you similar advice. )

All my best,

Matt Elliott
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Alain Picard, Agent, Puyallup, WA
Sat Sep 22, 2012
I would talk to a Real Estate attorney about this. If your contract wasn't already voided I would have told you to try to ask for an extension from the seller and offer to pay some kind of fee per day past the 30 days and you could have asked your real estate agent to pay some or all of the penalty since you wanted more than 30 days and they didn't put it in the contract. If your contract said that you have 30 days to receive your loan and you haven't done that then the seller can most likely give notice to cancel but again I would talk to an attorney about this.
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