When can i back out of a deal?

Asked by Ken, Rancho Cucamonga, CA Mon Jan 16, 2012

Okay so here are the facts, we accepted a dual agency offer in later December with a closing date of I believe 2/4. The buyers requested that we fix some outlandish items, just to be cheap and difficult I assume (another story). Anyhow, we signed indicating no repairs will be done and we requested that all contingincies be removed. I will call him their realtor (because we are getting the raw end of the deal...again another story), said they are okay with contingincies being removed (which sucks). Anyhow we have till 1/20 to get section 1 clearance done and their realtor is threatning us with a notice to perform, which is not an issue and we can have it done but the company kept having to reschedule and we could not find some certain materials. None the less, they are concerned they won't be able to get funding. So...after our agreed upon deadline, can we back out? Or do we have any recourse? We are totally upset by this ordeal and still want to sell, but the realtor is horrible.

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16
Ron Thomas, Agent, Fresno, CA
Mon Jan 16, 2012
If your Listing Realtor is also working as their Agent; then why is he working so hard for THEM?
Talk to his Broker and maybe ask the Broker to take over your end of the Deal.
Whether they fulfill their end of the Contract by getting their funding, does not affect your responsibilities to fulfill your end.
It sounds like you will have to do the Section 1 things, no matter what; so go ahead and do it. If the company cannot do it on time, get another company or file for an extension.
You must work in good faith so that you have a leg to stand on.

Good luck and may God bless
2 votes
Chris Gorno, Agent, Carlsbad, CA
Mon Jan 16, 2012
Ken~
The Seller is typically responsible for Section 1 repairs/clearance, so if you go ahead and complete the work, then get contingencies removed in writing, immediately. If they don't remove them, issue a Notice to Perform. If the buyer does not perform in time, then you have the option of cancelling. If they dont close on time, you can also issue a Notice to Perform. Buying and Selling is such an emotional experience, just be careful if you do end up having an option to cancel...as this could be the best offer you ever see. I too agree, that it may be best to get the agents broker involved if you feel you are not being represented fairly. Good Luck Ken!

Chris Gorno
Web Reference:  http://www.ChrisGorno.com
1 vote
Shannon Ande…, Agent, San Diego, CA
Mon Jan 16, 2012
Ken, you have asked this before and the answer is still the same..........if in the contract you agreed to section 1 work you are on the hook for it. Talk to an attorney but it would be my understanding that the buyers and the agent could have a case against you.......the buyers for specific performance and the agent for their commission. Why are you so intent on cancelling this deal if you still want to sell? Perform per the contract as you have agreed and move on is the best advice I can give. Now as for them not being able to get funding, that is a different story...when it comes down they do not have the right to just switch lenders. That is in paragraph 3k of your contract. So if they cannot close and are within 3 days of your close date, then you can issue a Demand to close escrow and assuming you have fully performed as per the contract, including section 1 and if they cannot close you can cancel. This is my understanding of the contract, but again, talk to an attorney to confirm what rights you may or may not have.

As for the agent.........sorry you have had a bad experience. Did you agree to dual agency in the beginning or did sign something saying it was ok or not ok? Did you sign something called Disclosure and Consent for representation of more than one buyer or seller? Did you sign and agency disclosure? These are things you can have an attorney check out for you to see if the proper disclosures were signed. Did you convince the agent to reduce commissions? Sometimes that happens and you do get what you pay for.
1 vote
Jennifer Bla…, Agent, Basking Ridge, NJ
Mon Jan 16, 2012
If the agent isn't doing a good job managing a dual-agency deal, the broker can give him/her some guidance. Ron is right - maybe the broker can take over your side of the deal.

You can't walk after your closing date - and it sounds like the extension is required because of something on your end, so it's not that you are in a position to accept it or not - it's the buyer who can say no to the extension and pursue damages from you, not the other way around (unless I have missed something).

As Ron said, you need to work in good faith to move this along and get done. It's a buyer's market - every deal I have had recently has had sellers feeling like they were getting the raw end of the deal. I don't disagree with them, but that's they way it is right now.
1 vote
Chris Gorno, Agent, Carlsbad, CA
Tue Jan 17, 2012
Keep us posted Ken! We would like to hear back on things work out for you and your Grandmother. Just curious is the home in Carmel Valley or Rancho Cucamonga?
Chris
0 votes
Kari Shea, Agent, San Diego, CA
Tue Jan 17, 2012
Hi Ken,

Best of luck. The broker should understand they are legally exposed in this situation. Should you not be satisfied, your next step is the DRE. If the conversation is not going well, make the broker aware you plan to contact the DRE to file a complaint and then retain a real estate attorney to pursue the matter.

Mark & Kari Shea
0 votes
Ken, Home Buyer, Rancho Cucamonga, CA
Tue Jan 17, 2012
Thanks for all the great insight...I called the broker and now I am just waiting for a return call back. The issue is actually much more complex than I posted earlier. My 90 year old grandmother owns the home and she listed with this agent. Come to find out, she had no idea of what the contract stated, partly because she is 90 and has some health issues, and the fact that the agent explained nothing. Bottom line is she was taken advantage of...that was the reason for us willing to back out and re-list with someone else. The agent never explained to her about the commission and instead took the 6%, after the house hit the mls she brought in her buyers she had been previously working with. That was on day 1, then convinced our grandmother to sell the property under market...just a mess. I have done everything by email with the agent for record, telling her several times our grandmother is not in the position to make sound decisions and she instead insists on moving forward. I am hoping to have a good conversation with the broker today.
0 votes
Ken, Home Buyer, Rancho Cucamonga, CA
Tue Jan 17, 2012
Thanks for all the great insight...I called the broker and now I am just waiting for a return call back. The issue is actually much more complex than I posted earlier. My 90 year old grandmother owns the home and she listed with this agent. Come to find out, she had no idea of what the contract stated, partly because she is 90 and has some health issues, and the fact that the agent explained nothing. Bottom line is she was taken advantage of...that was the reason for us willing to back out and re-list with someone else. The agent never explained to her about the commission and instead took the 6%, after the house hit the mls she brought in her buyers she had been previously working with. That was on day 1, then convinced our grandmother to sell the property under market...just a mess. I have done everything by email with the agent for record, telling her several times our grandmother is not in the position to make sound decisions and she instead insists on moving forward. I am hoping to have a good conversation with the broker today.
0 votes
Kari Shea, Agent, San Diego, CA
Tue Jan 17, 2012
Hi Ken,

Dual agency has reached heightened legal implications for agents and brokers. If the agent is representing both you and the buyer, they have a legal fiduciary responsibility to both parties. By your account, that is not happening. If the agent is not the office broker, make an appointment with the broker of record. They are ultimately legally accountable for their agents. The dual agency is with the broker, not the agent. Tell the broker you want another agent from their office to represent your interest. If they are smart, they will accommodate you.

If your agent is the office broker of record, call the CA Department of real estate and file a complaint. Ask them what you can do to sever the dual agency agreement and get an agent to represent your interest pronto.

As for the mechanics of the deal, Christine Gorno is accurate.

Best of luck,

Mark & Kari Shea
Shea Real Estate
0 votes
Cory La Scala, Agent, San Diego, CA
Mon Jan 16, 2012
Ken, if you're not closing until the 4th, why do you have to have the termite repairs done by the 20th? That doesn't make any sense. If for some reason you agreed to have the Section 1 repairs done by a certain date, just ask for an extension. But, mainly, the lender needs the clearance to fund the loan.

And, why did you accept an offer if you weren't sure the buyer could get the loan? In this market, offers are sent in with a pre-approval letter, not just a pre-qualification, from a lender. If your agent didn't do this, then I'd definitely get on the phone with his broker.

Never, ever use the same agent for both sides. Ever.
0 votes
Ken, Home Buyer, Rancho Cucamonga, CA
Mon Jan 16, 2012
I understand, we are taking care of what needs to be done within the required time frame. They just wanted it done yesterday and according to their realtor, they are getting a back up lender so that may be their issue to. What is our recourse if at the end of closing they are not ready?
0 votes
Dana Rosas &…, Agent, Covina, CA
Mon Jan 16, 2012
Yes, you have the right to back out after the closing date . If I were you I would hire another broker. Your broker has a fiduciary duty to you as well as the buyer. It soulds like the broker is leaning towards the buyer which may not be fair to you. Get a broker that is well known that has a lot of experience. You will be ok. Stick to your gut feelings and do as you would want others to do to you. Dana Rosas & Eva Grijalva 626-644-9331
Web Reference:  http://www.danarosas.com
0 votes
Ken, Home Buyer, Rancho Cucamonga, CA
Mon Jan 16, 2012
After our closing date passes, can we walk? And are we forced to accept an extension? Can we ask that they pay us for everyday they are late?
0 votes
Ken, Home Buyer, Rancho Cucamonga, CA
Mon Jan 16, 2012
What could the broker do?
0 votes
Jennifer Bla…, Agent, Basking Ridge, NJ
Mon Jan 16, 2012
Hi Ken,
It sounds like your biggest problem is with the realtor - why don't you call the broker? That might help.
Jen
0 votes
Rich Homer, Agent, NAPLES, FL
Mon Jan 16, 2012
Wondering if it is an As-Is sale, but seems the answer is no. Usually (you should consult with an attorney who will review the specific Agreement) repairs cannot be forced on a seller. Have you tried a 30 minute consult with a real estate attorney? Some will offer the first 30 minutes for free to help you decide if you should proceed with engaging them in the matter.
0 votes
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