House #13: Dead Deal

January 4, 2010 · 7 comments

If you’ve been following the saga of The Poor House, here’s the next chapter…

After telling his agent that he would meet with her to discuss getting the purchase back on track, the buyer again stopped returning her phone calls. As somewhat of a friend to the buyer, she even went to his house to talk to him, but he wouldn’t let her in.

Ultimately, at this point, the deal is dead, and we’ll be putting the house back on the market…

But, that’s not the end of the story!

Apparently, the buyer’s agent is so angry about the fact that her buyer refused to go through with the deal at the last minute, she is planning to sue him for her share of the commission (about $5000). For those who aren’t familiar with real estate law, the Purchase & Sale agreement provides for the agents to go after their commission if the buyer doesn’t act in good faith when trying to close the transaction.

I’m fairly certain that her main goal is to scare the buyer into actually closing on the property, but I’m also fairly certain that she’ll be happy to follow-through on the suit if she has to. In fact, the agent is so adamant about getting the buyer to live up to his agreement that she has convinced my wife (and me as well) that we should be suing the buyer as well, for both my wife’s half of the commission (about $4000) and our lost income due to the sale not going through.

We’ve probably had about two dozen or more contracts fall through in the past 18 months, but this is the first time I’ve ever really been so pissed at the buyer that I’m willing to go through with a lawsuit. Generally, contracts fall through because the buyer isn’t in a financial position to go through with the deal or because some outside circumstances affect the transaction. In this case, the buyer just changed his mind at the last minute, and won’t even return phone calls to discuss the situation.

In addition, we’ve already moved all the staging furniture out of the property (to Staging Project #3), so now we have to go purchase an entire set of new furniture and re-stage the property — a process that will likely take another two days or our time and effort. This just adds to my anger and frustration.

I’m not sure that we actually will go through with a lawsuit, but my wife spoke with her broker today who said that she believes we have a good case, and that the broker would support our speaking with the attorney the brokerage is affiliated with. So, my wife plans to speak with the attorney tomorrow, and we’ll go from there.

I’ll let you know what happens…

7 responses to “House #13: Dead Deal”

  1. Bilgefisher says:

    I know you are both in the right. The sad part is you will look like the bad guy in the end if the lawsuit is pushed forward. Contracts just don’t seem to hold the weight they use too.

    Good luck either way.

  2. Even if that guy changed his mind and wanted to close again I wouldn’t trust him. Are you dealing with Brett Favre? you can tell us πŸ™‚

  3. Steph says:

    One of my biggest pet peeves is when people don’t call back when a deal starts to go South. It drives me absolutely NUTS. If you’re going to back out of a deal for whatever reason, you should have the balls to man up and at least talk to the parties involved so they know what’s going on.

    When people pull that crap with me (and it’s happened many times), I don’t ever do business with them again.

    I know you guys are pissed off and frustrated, but it might be more of a hassle than it’s worth to pursue legal action..


  4. Sean says:

    Wow, I had no idea that legal action could even be taken. I can understand how incredibly frustrating this could be on top of all the other houses that not quite closing.

  5. Brian says:

    Sean ~ of course legal action “could” be taken, a real estate contract is a legally binding agreement… in this case many people are out money due to the buyer’s lack of follow-through.

    The question is whether it is really worth the hassle of the lawsuit… If I was you, I would support the selling agents efforts in her legal pursuit, but I would avoid wasting my time and money on it…

  6. J Scott says:

    Thanks everyone for the comments and feedback!

    Just as a quick update, we spoke with a litigation attorney today affiliated with my wife’s brokerage, and he basically said that — given the facts as we’ve presented them — it’s a pretty open-and-shut case, and any reasonable judge would award commissions to both agents. He also said that as the homeowners we have some recourse to claim damages, but exactly how much we could reasonably get is anyone’s guess.

    He works on contingency (i.e., he only gets paid if we win, and he takes between 30-40% of the winnings), and the effort on our part is pretty negligible. So, there is little reason not to sue given those circumstances…we either spend a little time and get nothing or spend a little time and get something… πŸ™‚

    Plus, there’s always the chance that the buyer will come to his senses and just complete the transaction as he originally agreed…

  7. Steph says:

    In that case- sounds like you might as well go for it.

    Looking forward to hearing how it shakes out…


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