posted
I have a story to tell and a question to ask. It’s a long story, and it’s going to make me look very stupid, but it’s put me in a very serious and scary situation and I’m hoping there might be someone here who can help me.
I’m a regular poster, but I’ve come here with a new alias because I’m fairly embarrassed about this. I got into this situation by placing a ridiculous amount of trust in a real estate agent that I’d hired. In my defense, you must remember that (a) I’ve never sold a home before, and (b) the real estate agent in question is married to my cousin so I thought I had a special reason to trust her, when in fact she turned out to be lying to me to secure a commission.
My wife is just entering her seventh month of pregnancy. About 2 months ago she became infatuated with the idea of finding a bigger house to give us more room to raise the child. I didn’t care one way or the other, but I knew that my cousin’s wife was a local real estate agent, so we invited her over to ask her about the state of the marketplace. As soon as she entered our home she started telling us what we were going to need to do to the house to prepare it to be put on the market. We asked her about whether it would be a good time to look for a new home, and she said it would be an excellent time and set up an appointment to show us some homes. We told her that we were just exploring our options, but she continued assuming that we were going to be moving in the next two months.
The following two Sundays we went out with her to look at houses, supposedly just so that she could get an idea what kind of things we wanted in a new home if we were to get one. The last house we looked at on the second Sunday seemed ideal, and she could tell we really liked it. As we were driving home, she asked if we wanted to make an offer on the house. We said that it was a possibility, and she told us that this house would not stay on the market very long and if we wanted any chance at it we should make an offer immediately for full asking price.
With anyone else, this kind of pressure would have set off alarm bells. But my aunt, who is her mother-in-law, is one of the nicest people in the world, and she’d recommended her to me, so I trusted that she knew what she was talking about and was looking out for my best interests. So we agreed to make an immediate offer.
But that was only the warm-up act for our real stupidity.
We’d let it slip earlier in the day that we’d saved up just enough money that if my wife and I both cleaned out our savings accounts, practically to the penny, we would have just enough to make a down payment on a house in this price range. So before she rushed into her office to draw up the contract, she asked us if we’d like it to have a contingency clause.
We’d never heard this phrase before she mentioned it to us. We asked her what it was, and the way she explained it to us is that if someone has no savings and very high debt and they weren’t sure about buying a home, they’d sometimes put a contingency clause in a contract so that they didn’t go bankrupt, but she made it sound like it was only used in rare cases where the person was a high default risk. Of course, we found out later that anyone who doesn’t have millions of dollars and isn’t buying a bunch of homes for investment always has a contingency clause in a sale contract. But she made it sound like they were only for special cases.
We asked her what her opinion was in our case, and rather than explaining the pros and cons of the situation, she came right out and advised us to leave the contingency clause out of the contract. We made it very clear that we were in no position to blow all of our savings and be stuck with two mortgages, and she assured us that there was no way our house wouldn’t sell immediately, and even if it didn’t we could always get out of the contract.
We took her at her word and let her draw up the papers as she suggested. She came back to our home about 90 minutes later, got us to quickly sign and initial every page, explained to us that the sale would close in six weeks (on April 1st, 2008), and that this would give us more than enough time to get our home sold.
She put our home on the market, every time she saw us she would make the same assurances. About 10 days later I woke up in the middle of the night with a panic attack, realizing that nearly one-third of the time from listing to closing had elapsed, and not a single person had even looked at our home. I was up all night shaking and vomiting, and I called in sick from work the next day. As soon as it was a reasonable hour, we called our agent and explained our concerns.
She came over and once again assured us that our home was right on the verge of selling, that she would not leave us with two mortgages, and that if nothing happened she would get our sellers to move back the closing date or cancel the contract.
After hearing these promises once again, and finally realizing that she’d never given us anything to back them up with, we asked her to put them in writing. To our surprise she did, delivering a written agreement on company letterhead that if we didn’t get an offer on our home by March 8th she would move the closing date back to May 1st, and if we didn’t get an offer by April 1st she would get us out of the contract. There was no indication of the fact that the sellers would have any problem with this, just the statement that we could get out of the contract at any time. She signed this paper and left it with us.
March 8th came and went, and we still hadn’t had any real interest in the sale of our home, so we asked her to implement the first stage in our agreement and push back the closing date. She said she would. Then last Tuesday, March 11th, she stopped by our home in the evening. She explained to us that she’d spoken to the sellers’ agent, and he said that if we tried to move back the closing date they would immediately begin lawsuit proceedings. She assured us that they had no grounds to do so, and he was probably just blowing off some steam. I said if this was the case, we would like to back out of the contract as she said we could do at any time. She said she would get the paperwork together in the morning.
The next morning I called her up and asked her exactly what grounds she had for telling us that we couldn’t be sued. She said that she’d talk to her qualifying broker and get back to us with some legal specifics. About half an hour later she called me and finally admitted that she couldn’t get us out of the contract, and the sellers did have grounds for a lawsuit against us.
The next day, March 13th, I took some time off work and we set up a meeting at her office (an affiliate of a major national chain) with our agent, her boss the qualifying broker, someone else above her, the mortgage broker who pre-approved us for the loan, my wife and myself.
They had planned to tell us what our options were and what the legal consequences of backing out of the contract would be. I explained to them how our agent had specifically and materially misrepresented the contract that we signed, repeatedly, verbally and in writing, and how we never would have signed the contract if she’d told us the truth about its consequences. I showed her the written agreement that she’d given us, and explained what she’d told us about both the ease in which our house would sell in 6 weeks and the ease in which we could break the agreement if our home didn’t sell. You could see her supervisors’ faces go blank with shock.
Realizing how serious this was, their conversation changed rapidly from telling us what could happen to us if we backed down to trying to come to an agreement for how they could help us extricate ourselves from the situation. The qualifying broker agreed to draw up some contract termination papers. Of course, she couldn’t tell the truth about how we’d come to be in this situation in the paperwork. But she made a fairly convincing argument to go with the termination agreement that we would be unable to proceed with the contract based upon my wife’s late-stage high-risk pregnancy and some changes that were happening to my employment.
They drew up the papers on Friday, hoping that this would convince the sellers to sign them so they could list the property for the weekend. My agent brought the agreement to my work and had me and my wife sign them, and then dropped them off to the sellers’ agent.
Later that evening we talked to the qualifying broker to see if anything had been done with the papers. She said she would contact the sellers’ agent and get back to us. Late Saturday afternoon (about 24 hours later) we hadn’t heard back from her so we called her back. She stated that she had talked to the sellers’ agent, and he stated flat out that he didn’t believe a word of our excuse, that he thought we were just getting cold feet, and while he delivered the paperwork to the sellers he didn’t expect them to agree to it.
So now the qualifying broker (our original agent’s supervisor) said that she’s going to call the sellers’ agent’s qualifying brokers on Monday morning and set up a face-to-face meeting to try to explain the situation. That is the last that we’ve heard. Meanwhile, I haven’t slept since about Tuesday, nor have I eaten a meal that wasn’t promptly thrown up.
We’re going to try to see a real estate attorney on Monday to get some realistic advice, but in the meantime I was wondering if any of our legal experts or people familiar with real estate might be able to answer some questions for us.
First, what should we expect the real estate company to do for us if talking to the sellers’ agent’s supervisors doesn’t help? The qualifying broker does seem to be taking the situation very seriously and has been taking some steps to resolve the problem, but she isn’t going to be able to make the sellers sign the termination agreement. If the meeting on Monday doesn’t help, what can I suggest as our next step? Would it be too much to suggest that they personally make a deal with the sellers to make it worth their while to terminate, or that their company buy our home as a rental or an investment property, in order to honor the agreement with our agent? Is there anything else that they could do to make this situation work that I haven’t considered?
Second, if this situation isn’t resolved in about two weeks we are going to have to decide whether to go ahead with closing or refuse and open ourselves up to a lawsuit. If the sellers did choose to sue us, how much help would it be in court to make the case that our agent had lied to us, and that we have written proof of the fact? Would a judge likely consider that in our favor, or would he award a judgment to the sellers and tell us to go back and sue our agents later? Is there anything else that could possibly get us out of this contract, or would it be best to just close on the house and have two mortgages?
Third, I have talked to investigators at the state Real Estate Licensing Commission and the Realtor Association, and they both seemed interested in getting a written account of the situation. I haven’t sent one in yet, as I’m still hoping that I can resolve this with the company. But if I can’t, is there anyone else I can go to? Should I report it to the company’s corporate offices? If I end up having to carry two mortgages, would it be worth getting an attorney and trying to sue for damages?
I’m sorry this is such a long story of my obvious idiocy. It feels better to talk about it, but I’m still panicked and unable to sleep. This seems like a worst-case scenario, and I’m not sure what we can do. I know this is a very tricky situation, and I appreciate any advice that anyone can give us. If anyone would like to have a look at the purchase agreement or the written agreement that we made with our agent, they’re scanned and posted online, and I’d be happy to email some links to anyone who writes me a personal email through the forum.
Thanks again for listening.
Posts: 9 | Registered: Mar 2008
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posted
I think reporting it to the corporate offices is a good idea. And yes, if you get sued or backed into carrying two mortagages, I would sue. But I, of course, am not a lawyer-- that's just what I would do as the wronged person in this.
She did things that are not only unethical, I'm pretty sure they're illegal. One way or another she needs to be held responsible.
Posts: 21182 | Registered: Sep 2004
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posted
Don't beat yourself up over this. It's not unreasonable to trust a family member recommended by another family member.
From my layperson's understanding, it sounds like you're in a better position than you think: you have your agent's words in writing as well as everyone else on your half of the situation involved and fully in the know. You're aware of and/or investigating your options, and you're on top of the situation.
My only input: is there any way you can get your current property listed with someone else?
Posts: 4313 | Registered: Sep 2004
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posted
Wow, was that cousin the agent stupid. Good for you that she was stupid enough to put that stuff in writing, of course, but not so good for her.
I have no advice, but I wish you luck.
Posts: 8355 | Registered: Apr 2003
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posted
If you live in Utah, email me. Is there any chance of renting your current house in an arrangement that would carry the mortgage? Your interest rate on the second house would not be great, but it could see you over.
If you don't live in Utah, what can I say? Not eating is one of the best ways to ensure labor starts. Get your wife into a therapist for anxiety (if she will go, work with your obstetrician). See to your wife's health as foremost. This agent is a lying sack of horse pootey. We have done several real estate deals over the years and this makes me lose my appetite reading it, and I don't even know you (I don't think.)
Posts: 11017 | Registered: Apr 2003
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posted
This is so not what you need just before the stress of adding a baby to the family. I hope it all works out soon. 8(
Posts: 2283 | Registered: Dec 2003
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posted
I don't live in Utah, Pooka, but thanks for the offer. And I've thought of renting, but I don't imagine that finding tenants would be much easier than finding buyers, and I don't know the first thing about being a landlord. Also, we were counting on the sale to replenish our savings before the baby came.
I just noticed something in the contract. There is a section on page 2 of the purchase agreement called the Brokerage Relationships Disclosure. Section 5 reads as follows:
quote: Buyer's Broker [_]Does [X]Does not have a material interest or relationship of a business, personal or family nature in the transaction, including compensation from more than one party.
She checked that she does not have a relationship of a family nature, even though she is married to my cousin. It may seem minor, but that's why we chose her to represent us. I wonder if that would help invalidate the contract, or if it's just something we could show in a complaint to the licensing commission.
Thanks everyone for your posts. Talking about this is helping, and we appreciate the input. Posts: 9 | Registered: Mar 2008
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posted
The legal answer depends on so many factors - the exact contents of the contract, the state's particular laws, whether there's an HOA, whether the agent is a buyer broker or not, etc. - that there's no meaningful advice to be given here other than to go see a real estate attorney, as soon as possible.
I would avoid contacting the agent's company or reporting her to the state or association until visiting the attorney. Not reporting her is a negotiating chip and you don't want to hobble the attorney by using it too soon.
I'm sorry you're going through this.
Posts: 26071 | Registered: Oct 2003
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posted
What is your earnest money in this contract? My husband (who has been handling 7 properties from a deceased friend this year) says that if you cede your earnest money, they could be stuck in court for years unable to sell to anyone else and relying on the courts to compel you to pay. You don't want to actually do this, but knowing whether it applies in your area gives you leverage. This pathway would involve a lot of legal fees as well.
We actually had a similar situation a few years ago. We had a lowball offer accepted based on no contingency, because it was a much bettter market 5 years ago, and we had been landlords for 10 years and were willing to rent the old property. As it happened, we sold it in the last two weeks of the incoming contract.
(With respect to that, there are landlord services that could handle the rental. They are pricey, but overcoming your anxiety is about realizing you do have options.)
Email me with how to view the contract. That will show the earnest money.
Posts: 11017 | Registered: Apr 2003
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posted
Erosomniac, we've thought about re-listing with someone else, but right now we're just leaving it on the market temporarily while we see what we can do about terminating the contract. After everything we've gone through, if we can get out of this I think we'll just stay where we are for a while. The idea of moving was nice, but it's not nearly worth going through all this in the third trimester.
If we can't get out of the contract, we're going to consider whether we want to go to the trouble of agent hunting, or just leave it as it is and demand that they waive their commission on both sales, and maybe even see if we can make them pay our mortgage in the meantime.
And thanks for the tip, Dag. We're going to try to make an appointment to see someone tomorrow. And while I talked to people at the Realtor's Association and the Licensing Commission, I avoided giving any names or mailing in any reports, so we're good there.
And Pooka, there's an email waiting for you. We offered the earnest money in return for terminating, but we're not sure they're going to accept it.
quote:If we can't get out of the contract, we're going to consider whether we want to go to the trouble of agent hunting, or just leave it as it is and demand that they waive their commission on both sales, and maybe even see if we can make them pay our mortgage in the meantime.
Do you have any reason to think this is a possibility?
Duped, I didn't get it yet, and I checked bulk. Nevermind, there it is. Posts: 11017 | Registered: Apr 2003
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posted
That's one of the things we're going to talk to an attorney about, but right now it seems that they realize that they're in some trouble. We're hoping that they'll do whatever they can to satisfy us. And it doesn't make sense that we should be held to financially reward a person who so clearly swindled us.
But if it's not a possibility, we will list with someone else.
Posts: 9 | Registered: Mar 2008
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posted
Good on you for getting something in writing. Very smart. I'm sorry you were swindled by someone you trusted.
quote:Originally posted by Dagonee: ... that there's no meaningful advice to be given here other than to go see a real estate attorney, as soon as possible.
Exactly. You want an attorney who specializes in this area, has a good track record, and has contacts in the area because he or she has been working there for awhile. This may cost money.
That money is worth (I think) 10X what you spend.
Once you have a lawyer on retainer, things will both happen quickly and slow down. You will have someone with a highly, highly vested interest and training in representing your interests to the fullest extent possible. It is worth spending money to make sure you find someone in maximal position to do this. I think your stress level will drop tremendously after your first consultantion with your attorney.
What happens quickly is that you learn your odds, the risks, and the likeliest outcomes. What happens slowly is that you no longer have to talk to anyone about this -- it all goes through your representative, the lawyer, so nothing gets agreed to or signed quickly. (At least it should. Don't make the mistake of doing anything on the side, even family discussions outside of you and your wife.)
Save all your paperwork, and make photocopies to have someone else save. Or, if you have a safety deposit box (not a bad idea to get one if you don't -- small ones are fairly cheap), store them there and just carry the photocopies around. (Or, if your lawyer wants the originals, of course go with that.)
She works for a firm, so they have a helluva lot of risk on the line. As Dagonee said, keep all your bargaining chips on the table, and get thee to counsel ASAP.
quote:Originally posted by Duped: And while I talked to people at the Realtor's Association and the Licensing Commission, I avoided giving any names or mailing in any reports, so we're good there.
And Pooka, there's an email waiting for you. We offered the earnest money in return for terminating, but we're not sure they're going to accept it.
To reiterate -- don't do anything else until you have legal representation, please. If I were you, I would turn off the voicemail, not answer the phone, and not sign for any packages, either.
Seriously, you need to have a professional vet any moves for you first.
---
Edited to add: I don't mean it's wrong to email pooka! I was talking about interacting non-anonymously in a transactional manner; i.e., taking the phone call that tells you they accept earnest money, but without a savvy lawyer trained in this area who knows the local rules ... you don't really know what that acceptance will mean.
---
Edited again to add:
Can't stop thinking about you.
*big, fierce hug*
The world isn't full of horrible people. There are a lot of kind, decent people who strive to do right by others, always. Some are on this thread. You got a bad apple -- maybe just phenomenally incompetent, maybe deliberately deceptive, maybe some mix. Hunker down and get through it, but please don't get too hardened. Just use the learning and wisdom you get from it to prepare better for the future and help others when you can.
Remember, though, that the Real Estate Licensing Commission and the Realtor Association are, in the end, there for the sake of realtors, and they have to make their decisions based on their ongoing relationships with the realtors under them. You cannot know the intricacies of the power plays and other commitments here, and you cannot -- please! -- trust them to have your best interests at heart.
That is why you have to pay someone who is under explicit (and enforcible) obligation to you and you alone -- a lawyer. The very best thing you can do right now is to avoid making the situation any worse, and for that you need your own trained counsel that is solely and specifically planted in your court alone, not anyone else's.
posted
Oh wow. That's rough. I wouldn't call you stupid at all.
Nothing you did sounds all that stupid to me. You did what you were supposed to. You found an agent -- someone who's supposed to be on your side and help you through the complicated intricacies of home buying -- and it was one you had special reason to trust. They betrayed you. You weren't stupid, you were back stabbed. You have nothing to be embarrassed about.
Beyond that I can offer no advice just lots of hugs and good vibes. (((Duped)))
Posts: 3295 | Registered: Jun 2004
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posted
Nothing new has happened, but I just wanted to stop back in and say thanks to everyone for all of your support. I went to see a doctor last night for the anxiety, which I've never done in my life. I got something that allowed me to sleep 8 hours, the first time since Tuesday that I've had more than 2 hours a night, so I'm feeling better.
I have a message in with a law firm that was unofficially recommended by the investigator at the licensing commission, so hopefully I'll be able to talk to someone today. And the qualifying brokers over both agents should be meeting today, so something may come of that, but I'm not holding my breath.
I'm so used to the idea of a lawyer being a last resort that I was dragging my feet on this step, but now I wish I'd been working through one for the last week. I think next time I'll hire a lawyer before I find an agent.
And that's good advice about not talking directly to anyone but the lawyer, as well as keeping the original documents away from the house. We had considered that our agent has access to our house. We don't want to seem too paranoid, but it's better to be safe than sorry, neh?
We'll come back and let you know what the lawyer says. Hopefully it'll be good news. If nothing else, at least we won't be guessing about where we stand any more. That will be a relief.
Posts: 9 | Registered: Mar 2008
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posted
I'm glad you saw someone about the anxiety. I was in therapy already going into the purchase I mentioned. Posts: 11017 | Registered: Apr 2003
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posted
Hi. One last question. I was unofficially recommended an attorney from one of the investigators at the licensing commission, so I called the office first thing in the morning. His receptionist said he'd call me when he got in, but we haven't heard yet. I'm thinking I may need to just call around and find someone with an appointment open.
If I'm looking for a lawyer, do I just choose someone at random that works in real estate law, or are there any ways to make sure I find a good one? What should I look for, and what should I ask when I talk to them?
Any help will be appreciated. Thanks.
Posts: 9 | Registered: Mar 2008
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posted
The best way is to go by recommendation - can you talk to some friends who've used attorneys in the past to ask who they recommend? Even if the attorney doesn't specialize in real estate law, they may know someone who does.
We found an attorney that we needed in another state by asking a friend who was an attorney here. Funny thing - we had gotten this guy's name before, but when we called he didn't call us back. When my friend the attorney sent him an email telling him to expect our call - he talked to us as soon as we called. Sometimes you need an "IN" to help you get in touch with them.
Good attorneys usually = busy attorneys. So, they may be difficult to get in touch with at first. Be persistent.
And good luck - I feel for all of you. I wish I could help.
Posts: 14428 | Registered: Aug 2001
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posted
martindale.com is a website that allows you to search for lawyers. I'd look for someone who mostly does real estate and maybe a couple of related things. Be careful of anyone who has a laundry list of specialties. At the same time, I hope your broker is successful in convincing the other side that you are not just having cold feet.
Posts: 11017 | Registered: Apr 2003
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posted
Recommendations are definitely the way to go if you can find them.
Martindale isn't bad, but it's self-reported - essentially the same information as you get from the yellow pages with a little more detail.
Posts: 26071 | Registered: Oct 2003
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posted
Thanks. I just barely got off the phone with the lawyer that I'd tried earlier, and he will be able to squeeze me in at 4:00 p.m., so I'm lucky. I don't know who I'd have gone to for another recommendation around here.
I'll let you know what happens as soon as I get back.
edit: I just checked the guy I'm going to see in martindale, and his profile was empty (including the specialty field) on that site, so if I'd listed real estate attorneys there I wouldn't have found him. He is, however, AV rated. I guess that's a good thing. Hope he doesn't charge $500/hr.
posted
Good Luck, man. I'm sorry that you got screwed by a family member. Like erosomniac says above, you're not at fault for trusting a family member. We used my wife's Aunt as a Realtor and she was great. I'm sorry you didn't have a similar experience.
Posts: 4753 | Registered: May 2002
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posted
Now that you've gotten some good advice (get a lawyer) I would consider deleting this thread. It's a useful object lesson for people who haven't dealt with real estate contracts, but on the other hand it seems problematic that you specifically discussed/agreed with your agent that you would not have a contingency clause. Might be something you should kind of keep quiet about. I don't know the likelihood that a real estate contract problem would lead to the seller discovering internet forum postings, but why risk it?
Posts: 4287 | Registered: Mar 2005
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posted
It's not bad advice in general, but the only way this could affect any court proceedings that might arise out of this would be if Duped were willing to lie.
Posts: 26071 | Registered: Oct 2003
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posted
We did agree to leave out the contingency clause, but solely because we were deliberately misinformed about its nature. If we'd known exactly what it was and which of her promises our agent would be unable to keep without it, we would have asked that it be put in, which I'd freely admit in court. It is a good point, though, and I'll consider editing my first post.
I just got back from the lawyer, and there's some good news and some bad news.
[edit: This part of the post I think I may remove for the sake of paranoia. I've got some good cards to play, but I guess it would be best not to publish them in case someone happens to stumble across them. If anyone wants to know what my lawyer told me, feel free to email me. Or maybe I'll re-post once this is all over.]
posted
I'm glad the panic time is past, Duped, and I wish you continued good news. Thanks for updating.
Posts: 14017 | Registered: May 2000
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