Verbal purchase agreement and then backing out.

Asked by phillipledesma, Pittsburgh, PA Mon Oct 22, 2012

I presented an offer through my agent to purchase a house on a under a rent to own situation. The seller agreed and we had a date set to sign all the paper work and for me to hand over the agreed moneys. On the day before i received a call from my relator informing me that t he seller had gotten a last minute cash offer and decided to accept the other offer. I am curious, is this legal? Once you have an offer accepted even though it is a verbal one can they back out and sell to someone else. Would it matter if they had sent the counter offer and you had accepted it? I am just baffled that someone can say yes we are going to sell it to you and then on the last day after all the terms are agreed upon and you are going to sign the paper work for the house someone can turn around and back out.
Second question, do i have any legal recorse since i lost money taking off work for the signing and i was not informed of any other interested parites? Thanks for all the help.
Phill

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Abu Musa, Agent, New York, NY
Mon Oct 22, 2012
You may talk to a attorney about this . Because attorney will be able to explain this whole matter to you.
0 votes
Jenny Masait…, , Murrysville, PA
Mon Oct 22, 2012
There is nothing binding on "rent to own" verbal agreements When and if you ever wish to do so in the future you should seek a lawyer to draw up the agreement which would be unlike an agreement of sale. There are so many variations of "renyt to own" which is basically an "option" to buy in the future Usually requiring a down payment and part of your rent going toward your down payment and locking in the sales price. Most people who opt to do this have problems with credit scores and or closing costs etc. I don't know your personal reason for this option but it is a risky situation for many reasons, the biggest risk on your part is this...that owner/seller can collect your payments and still being owner put loans against the property and leins against it which would not be in your best interest since the owner has controll of those situations. It is similiar to a land contract in which the deed passes onto the buyer at a later date, again by a contract preferrably drawn up by a lawyer. I am an agent with much experience with options to buy etc. I would think you have credit score problems to go this route and I have much background in these situations. Always remember verbal agreements mean very little...always get things in writing and use people representing you to be familiar with your situation If you would like help or advise in the future feel free to cal me at 412-680-0382. Work on your credit and try saving some money. pay more than minimum on your charge cards if you're using them It will raise your credit rating! Good luck in your future
0 votes
Jeffrey Benn…, Agent, Pittsburgh, PA
Mon Oct 22, 2012
Verbal agreements to purchase real estate are not binding in PA. Until a written contract is signed by *both* parties, there is no legally binding agreement. Courts have upheld verbal *leases* in some cases, but not to my knowledge in cases with unsigned written documents. (I'm not an attorney, so this isn't legal advice.)

Keep in mind that this applies to both parties, and I think the opposite case is even more common - buyers backing out at the last minute and choosing a different house.

I understand your frustration, and when you're on the "losing" end it's hard to see the other side, but as comparatively objective Realtors we see this sort of thing quite often. To some degree this happens every time there are multiple offers on a house.

The seller is looking out for his own/his family's best interests (as you would no doubt do in his place), part of which is minimizing risk. A cash deal is *much* more likely to close - and close quickly - than one with lots of contingencies and special terms. Rent-to-own is riskiest of all (or at least right up there with "has a house to sell").

Even if you'd submitted a complete, signed offer with deposit, it wouldn't have mattered without the seller's signature.

I don't see any "malpractice" here on the part of the agents. Buyers and sellers are sovereign, and can do as they please independent of each other and the agents. We can go to great lengths bringing water and horses together, but agents have no control over the final decision to drink.

Last minute offers do come in, and even if you suspect the seller had the other offer all along, they're not required to disclose it (though most would). I sympathize with your disappointment and hurt feelings, but unfortunately this falls into the category of "that's life." You will incur many costs in the process of making the biggest purchase of your life, not all of them financial.

Searching for a home can be stressful, as you've already discovered, and I hope your next offer goes much better. If there's anything you can do to strengthen your position (e.g., adjust the price range so that you can make a straight purchase offer), that might help as well. Good luck!
0 votes
Frank E Hamm…, , Pittsburgh, PA
Mon Oct 22, 2012
Unfortunately a verbal is hard to enforce and courts are require so much documentation. If I was your agent I would've sent you a completed sales agreement via email for you to sign and send back with your hand money check and pre approval letter. This is enough to secure the property until you can be there to complete the sale.

I would not think that you would be very successful in recovering any lost money. I Recommend firing your agent and obtaining one that can think out side the box and can get things done remotely. We have things like overnight mail in which we can do business with to prevent such a future occurrence.

I will be more than happy to discuss with you anything you like on purchasing a property from remote locations. I have done this, taken photo's and advised my clients of the property and made all the arrangements for them until they could come out and close the deal. Just takes some work and effort on the Realtor's part, but can be done!.

My cell is 724-518-6564 and I welcome you to contact me at any time.
0 votes
Janice Caputo, Agent, Pittsburgh, PA
Mon Oct 22, 2012
Phill; sorry so frustrating, A legally binding agreement should be signed & dated by both parties. This is why we tell clients that "Time is of the essence" even when you do have an executed agreement the Seller can withdraw if your contingency dates have expired. Your agent should be told by the other agent another offer came, but the Seller can be fickle until Agreement Executed
0 votes
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