I'M MAD! Buyer Backing Out Of Contract
Hello To All,
I have a property listed for sale with a brokerage company. The selling agent also works for the brokerage company. The buyer is backing out of the deal because "He just doesn't like the house anymore". But then said because the knob on the trash compactor was missing in order to test it. I paid for the knob but was originally told by the manufacturer it wouldn't be in for a couple of weeks but it arrived today and the trash compactor works fine.
I've also installed new dishwasher, new flooring, etc. spending hundreds of dollars on requested repairs. And finally, I've been told that the Brokerage company never deposited the $500 deposit provided by buyer into the escrow account. Now buyer has "stop payment" on the check.
I have fulfilled all terms of the agreement but the buyer wants to walk away from the deal less than 4 business days from closing. What recourse do I have? Can I sue for specific peformance (breach of contract)? Can I sue the Brokerage Company for non deposit which I could have kept as compensation if deposited? Can I put a lien against the buyer and how do I do this? Plus the house has been off the market for 30 days.
Please Help before I bust!
Thanks - Lynn :-x
You are entitled to get $500 earnest moeny. It is the listing broker's responsiblity. It is their problem to get the money from the buyer. Anything other than that, you may have to sue them or move on to sell it to somebody else. If I were you, I would not use the same broker ever.
Yeah you can definitely sue. Not sure how mad you are but you sound pretty mad, so mad enough to sue
The listing agent's broker is technically responsible for giving the money back to you. So he owes you $500. The only time you would not get your money back is if your loan got denied! That is the only time. Otherwise, if you quit your job, don't like the house anymore, etc. and you pull out of contract, that is breach of contract. One of my colleagues actually has a buyer right now that is trying to pull the same thing... back out of the contract. She quit her job to make the loan get "denied" but we worked around her. Anyways, long story short, you are owed some money and that is very sneaky what the buyer did. I would call them or get your attorney to call the buyer and the broker to get some money back before you have to start legal precedings.
Obviously, your goal is to get your property sold and this buyer, rightly or wrongly, doesn't want to buy. To be sure of your options, I would consult a RE attorney. However, I don't think litigation gets you anywhere. Going after the buyer for specific performance will only tie up your property so that you won't be able to sell it to someone who wants to buy it.
LA probably requires RE brokers to deposit funds into their escrow accounts within a specific period of time. Eg, in PA we are required to do this within 1 business day of receipt of the funds. Check the LA licensing laws and if your listing broker didn't comply, I would immediately go see the broker with your hand out saying something like "put that $500 right here."
Once you get that $500, I would terminate the listing contract and carefully interview several other agencies.
File a complaint with the LA Real Estate Commission. They are required to deposit escrow, and will be in big trouble when the commission finds out they did not! Here's a link to commissions website with complaint form.
http://www.lrec.state.la.us/complaints.htm
Hey,
Without seeing the contract between you and the seller, no one here can give you an answer. It is nothing more than opinion based off guess work. I really would not put much value in it. I fact several of the comments have been dead wrong.
Basically, if it is a standard RE contract, there could be several different clauses in the contract the buyer could use to void the contract. The Seller could very easily use the Finance Clause to get out of the contract; it happens all the time.
Also, there could be a clause that limits the damages to the Earnest Money ($500), so you might not have any other recourse.
Bruce,
The issue, as I see it, is not whether the buyer had a right to terminate the contract. It's the failure of the listing broker to timely deposit funds in their escrow account. State RE Commissions get VERY upset when regulations relating to escrow funds aren't complied with.
Nancy
I'd say you're in a tremendously strong leverage position to get your $500 from the broker.
Although you sure have to be careful not to overtly threaten the broker with a complaint to the RE commission if he does NOT immediatly refund your $$$, I think he/she'd be mighty happy to give the $500 to you in order to see you no more.
Maybe just a very nice, non-threatening letter to the Brkr, telling him that you're sure he'd prefer to deal with you and go ahead and pay you back, rather than having to face "some" regulatory body....just broad strokes, not a rapier thrust to the heart.
Hey,
Nancy has an extremely good point. The broker may be in violation of RE law.
Regrettably, that does not mean the seller has claim to the earnest money (unless there is some specific state law).
Using the REA's violation of RE law as leverage against the REA to get $500 is a slippery slope; you are quickly moving towards blackmail.