Actually two

[PartyBiz]

Hello - Actually I have two questions. The first one is about a home that we were in the process of purchasing last year. It was a rental that we were living in, that we decided to purchase when the owner decided to sell. I had never done this before (purchase a home) and the property manager/realtor had us sign the contract. Then the inspector came out, and there was A LOT wrong with the home, and we didn't want to purchase it. I found out that we were legally bound by the contract, and there were two things in there that allowed us to get out of it, one was if we didn't receive a seller's disclosure by a certain date, we could terminate the contract, the other was that if the cost of the repairs (from the inspection) were more than 5% of the value of the home, we could terminate the contract. We terminated the contract on both points. We had $300 in earnest money at the title company. The seller is making a claim on that money, and the title company is wanting us to pay for the appraisal and survey. I just don't know legally about this money. I don't really mind the money going to pay the fees, but I really don't think that it is fair for the seller to claim the money and expect us to pay for these reports that we obviously are not going to use. They are welcomed to have them. What should I say to the title company?

The second thing is that we have to sell our home that we are in now, and have found another to purchase (job transfer). We had a realtor looking for us, and he really did not have our interest at heart, it was obvious. So the third trip we made out of town this week, we didn't call him, and we found a home ourselves, for sale by owner that we have decided to purchase. I feel bound to somehow have the realtor involved, because he did invest some minimal time with us. What would be appropriate?

Thank you for you help!

Ricci

 

[Attorney_Replogle]

First question -- your obligation, if any, to lose the $600 earnest money deposit, and pay for the appraisal and survey depend on the documents you signed. All documents you signed in connection with the attempted purchase of that first home (the rental home) are what control these issues. All those issues should have been covered in the documents you signed. So you will have to read all the fine print and discover what your obligations are.

Real estate is controlled by written documents between all the parties. If it is not in writing and signed by all the parties, then generally speaking any such agreements can't be enforced.

Second question -- your obligation if any, to pay your realtor is also dependent upon the written agreement with him. Often times there is a clause that speaks to this issue in the realtors agreement with their client. The usual rule of thumb is that he is still entitled to his fee unless your purchase occurs after a certain amount of time after signing the agreement with him. Hopefully this is clear.

Lastly, you should read up on the basics of home purchases at freeadvice.com/law/581us.htm.

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Mark B. Replogle

 

[PartyBiz]

<<All those issues should have been covered in the documents you signed.>>

They were ours per the contract. But since we terminated the contract, I was told by another realtor that the contract became null and void, and the obligations were no longer valid.

<<your obligation if any, to pay your realtor is also dependent upon the written agreement with him. >>

Well, we never signed anything. He was someone that I know, and I just called him and told him what we were looking for and we met him and he started showing us homes. That was it. So I assume that legally, I don't owe him anything, but ethically I feel that I do, because he spent time with us. I don't wish to use him as a broker for this transaction, but don't want hard feelings either. Thanks for your response.

Ricci

 

[Tracey]

Properly terminating a contract does not make it null and void: it triggers the "in event of lawful termination" clauses. The amounts you are supposed to pay the escrow company in the event of termination are valid charges.

Don't pay you real estate friend any money because you feel morally obligated. He'll turn around and sue you for a full buyer's agent commission. It happens; I swear! Take him out to dinner or give him theatre tickets, but don't give him cash.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.



[This message has been edited by Tracey (edited April 22, 2000).]