What can you do to protect yourself when a seller decides to sell to someone else before they sign the contract?

Asked by j, New York, NY Wed Apr 17, 2013

Both the seller and I agreed in terms to a selling price. Then I hired an attorney to draw up the contracts. When my attorney sent it over the seller now wants to sell to someone else. So now I don't get the house and I wind up losing my attorney's fee. How do I prevent this from happening?

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12
Phyllis Mehalakes’ answer
Phyllis Meha…, Agent, NY,
Wed Apr 17, 2013
Unfortunately J nothing is binding until both parties sign the contact. It's not uncommon in this market (I'm a broker in Manhattan) for buyers with accepted offer to be "bumped" by another buyer who offers a higher price. Keep in mind that this works both ways. If you as a buyer put an offer in on more than one property and received more than one accepted offer you are not obliged to move forward on the property you don't want.

The key in this market is to move quickly once you have an accepted offer in hand. This means you should be prepared and have an attorney before you find the property you want. You'll also need to have your broker try to expedite things and, remind the seller that it's their attorney who should be writing up the contract.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Wed Apr 17, 2013
Not sure why your attorney drew up the contract, the document really should have been forthcoming from the seller's lawyer to yours. Keep in mind that until an executed contract is in place, signed by all parties and deposit money exchanged, the seller is free to do as he/she wishes....
1 vote
Mark Fisher, Mortgage Broker Or Lender, Bronx, NY
Wed Apr 17, 2013
Unfortunately the seller is free to go with whoever they want until contracts are fully executed, signed by both buyer and seller.
Web Reference:  http://www.markfishernyc.com
1 vote
Draco Steve, Home Owner, New York, NY
Thu Jun 27, 2013
There is a way that you can offer the seller more money than you had agreed for. I don't think there is another easy way.
0 votes
Matthew Dors…, Agent, Philadelphia, PA
Thu May 9, 2013
You may want to consider not using an attorney if you are getting charged as unfortunately there is nothing you can do if the seller chooses to accept another deal over yours. Consider using a realtor as they would not charge you in a circumstance like this, ma
0 votes
Janet Nation,…, Agent, Baldwin, NY
Wed Apr 17, 2013
Hello J

Your experience is one of the issues that I educate my buyer clients on so that they can be prepared.

As mentioned if you want to prevent or reduce the changes of your experience from happening in the future you should:

1) make a highly competitive offer - the market is changing as there is a shortage of inventory where multiple buyers are bidding for the same home
2) move expeditiously with meeting with your attorney to sign the contract to get the process moving along and secure a fully executed contract.

Most attorneys do not charge a fee until the day of closing so you might want to look for someone else for the next time around. As a matter of fact as mentioned below, the buyer's attorney is not the one to initiate a contract, it's prepared by the sellers attorney so I don't understand a fee, unless it's for a prior consultation.

Note, you do not have a fully executed contract until all parties sign the contract. Sellers can accept a higher offer and change their mind about accepting your offer and as a buyer you can change your mind also and walk away; it works both ways . As Christopher Pagli mentioned below, unless both buyer and seller signed the "Sales Agreement" (offer) which is actually legally binding, no one is protected.

If I can be of further assistance, please let me know.

Janet Nation, CBR
Sailing Home Realty
Direct: 646-321-9649
Office: 516-377-4760
Licensed Real Estate Salesperson
http://www.jnationproperties.com
0 votes
Gail Gladsto…, Agent, 11743, NY
Wed Apr 17, 2013
First of all, why is your attorney writing up the contract? This is the job of the seller's attorney. Do not fall into that situation again. I am surprised your Realtor did not advise you about this.

Secondly, until you are in full contract, there is absolutely nothing that can be done.

If it were the Seller who was paying the attorney to draw up the contract, they might have thought twice about paying the attorney for two contracts.
0 votes
Thomas Moser, Agent, East Northport, NY
Wed Apr 17, 2013
Unfortunately, there is nothing you can do. Until you are actually in contract either party can walk away. In my experience, some sellers feel a sense of obligation to a buyer from who they accepted an offer. Others will throw them over for a nickel.

Tom Moser
Keystone Realty USA
http://RefundAtClosing.com
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Wed Apr 17, 2013
Unfortunately there is nothing you can do. Until you have a fully executed contract by both yourself as the buyer AND the seller, you DO NOT HAVE A DEAL.

What the seller did is totally ok, unfortunate for you, but ok to do. Speak to your attorney and see what your options are, but I'm pretty sure there isn't much you could do. Perhaps try to put a better offer? Maybe it'll get the seller to reconsider???

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
0 votes
Terry Koraha…, , 11358
Wed Apr 17, 2013
Hi J, your attorney drew up contracts?? usually it is done by the sellers attorney. If your attorney is charging you it is only fair that the seller re-imburse you for your cost.
0 votes
Richard Rick…, Agent, NY,
Wed Apr 17, 2013
Until contracts are signed it can go to any buyer. That's why I recommend to my buyers have everything in Place ahead of time or risk the chance of loosing a deal when you find one.
0 votes
Christopher…, Agent, Tarrytown, NY
Wed Apr 17, 2013
In NY its's anybody's house until contracts are fully executed between buyer and seller. The only other way to protect yourself is to have a sales binder in place which actually acts as a contract when an offer is accepted. Not many people use these in NY.

Chris
0 votes
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