Our Realtor Gets No Commission if Contract Expires?

[Seamaiden]

9/29/05

Hello. I am in California. I am hoping to keep this brief, though the story at this point is long. I would like to thank all who offer help on this forum in advance, as I do the same sort of work on the www, but only for pet fish.

Essentially, my fiance and I are in an agreement to purchase a home still under construction. The seller has repeatedly delayed close of escrow, on two occasions by leaving the country (to Chechnya) unannounced, and on at least one occasion for a period of two months because he was "mad" at us.

We've recently learned that he has omitted many originally planned items for the house, which include outlets to a kitchen island that are required by code, and have sent him a letter requiring that he install them per county code, among other issues. The only reason by which he can cancel would be to prove we cannot perform, however, my fiance and I have been sitting on the down payment for well over a month, and we have had to pay in order to keep the lock on our loan (we have had three extensions up to this point). This letter has angered him once again, and now he's digging his feet in.

In any event, we are now forced to sue as the seller is refusing any further negotiations, and is refusing a fourth extension. Our realtor has now informed us that because of this, the contract is considered expired and that she will be entitled to no commission or monies whatsoever. This is patently unfair in our opinion, and we'd like to know if we can somehow protect her and all the hard work she's done.

Because of the seller's behavior and threats, we've retained a real estate attorney. He seems to know his stuff, however, he's in hearings all day long and I'm rather upset to learn of this. Also, I'd like for him to focus on ensuring the arbitration clause would not apply to a failure to perform action at this point. Yes, I do plan on speaking with him on this issue, but I figure more heads than one might be helpful (or, if someone here can answer unequivocally then I don't have to bother him with this issue at all).

I have left out a great deal of information here, but if you folks think it would help round out the picture then just let me know.

Thanks,
Marina

 

[HomeGuru]

9/29/05

Hello. I am in California. I am hoping to keep this brief, though the story at this point is long. I would like to thank all who offer help on this forum in advance, as I do the same sort of work on the www, but only for pet fish.

Essentially, my fiance and I are in an agreement to purchase a home still under construction. The seller has repeatedly delayed close of escrow, on two occasions by leaving the country (to Chechnya) unannounced, and on at least one occasion for a period of two months because he was "mad" at us.

We've recently learned that he has omitted many originally planned items for the house, which include outlets to a kitchen island that are required by code, and have sent him a letter requiring that he install them per county code, among other issues. The only reason by which he can cancel would be to prove we cannot perform, however, my fiance and I have been sitting on the down payment for well over a month, and we have had to pay in order to keep the lock on our loan (we have had three extensions up to this point). This letter has angered him once again, and now he's digging his feet in.

In any event, we are now forced to sue as the seller is refusing any further negotiations, and is refusing a fourth extension. Our realtor has now informed us that because of this, the contract is considered expired and that she will be entitled to no commission or monies whatsoever. This is patently unfair in our opinion, and we'd like to know if we can somehow protect her and all the hard work she's done.

Because of the seller's behavior and threats, we've retained a real estate attorney. He seems to know his stuff, however, he's in hearings all day long and I'm rather upset to learn of this. Also, I'd like for him to focus on ensuring the arbitration clause would not apply to a failure to perform action at this point. Yes, I do plan on speaking with him on this issue, but I figure more heads than one might be helpful (or, if someone here can answer unequivocally then I don't have to bother him with this issue at all).

I have left out a great deal of information here, but if you folks think it would help round out the picture then just let me know.

Thanks,
Marina

**A: your Realtor is correct.

 

[Seamaiden]

Thank you for a very fast reply.

I must admit, I'm floored, and at this point feel terrible. She's put in a lot of work, but cannot find any other home that meets our requirements. It is for this reason that we've decided to hang in there and fight.

This site appears to be an excellent resource, keep up the good work.

Marina

 

[HomeGuru]

Thank you for a very fast reply.

I must admit, I'm floored, and at this point feel terrible. She's put in a lot of work, but cannot find any other home that meets our requirements. It is for this reason that we've decided to hang in there and fight.

This site appears to be an excellent resource, keep up the good work.

Marina

**A: Realtors work on commission. They do not get paid by the hour.

 

[Seamaiden]

Known and understood. It seems as though if it were that easy to deny someone their fair compensation, being a realtor isn't such a great proposition.
However, what is and what should be are two different things, aren't they?

We'll have to figure something out. Neither I nor my fiance can set well knowing someone has been working her behind off on our behalf yet not being fairly compensated. We may decide to just pay her something out of pocket, it just doesn't set well with us.

Again, thank you.

Marina

 

[pojo2]

If you and the boyfriend do not have an ironclad contract between yourselves concerning buying property with someone who is totally unrelated to you, then when talking to that Atty you better run that particular issue by him/her.

First it is a very bad idea unless you have all the money issues ironed out, like what happens if someone wants out, yes it happens just read a few posts herein, what happens to any money each puts down, can one or the other refinance and get the other off the mortgage on their own income if it becomes necessary, can one buy the other out and own nothing further when the property is sold at a huge profit and so on and on and on??

 

[Seamaiden]

If you and the boyfriend do not have an ironclad contract between yourselves concerning buying property with someone who is totally unrelated to you, then when talking to that Atty you better run that particular issue by him/her.

No, we don't have any writing on this, though we have both come to agreements regarding certain issues. There are others that become pertinent once we're married.

First it is a very bad idea unless you have all the money issues ironed out, like what happens if someone wants out, yes it happens just read a few posts herein, what happens to any money each puts down, can one or the other refinance and get the other off the mortgage on their own income if it becomes necessary, can one buy the other out and own nothing further when the property is sold at a huge profit and so on and on and on??

We have some, though not all, of these issues ironed out between us. Again, nothing in writing. We will consult our attorney as you've brought up at least one issue that neither of us had considered. It's also time that we get certain other affairs in order (such as wills/living wills, etc.).

Thanks,
Marina

 

[Seamaiden]

An Update

I would like to post updates as well as I can as our saga continues. (This is as much for those who offer their advice as it is for those who find themselves in an awful mess and have managed to find themselves here.)

I have not outlined the whole thing, as it's become a rather complicated mess of a home purchase, but my fiance and I will have a website up soon at mysincustomhomes.com/ where we plan on describing our ordeal in detail. The intention is essentially to warn others if they may find themselves dealing with this man.
Anyway, our story may now include fraud charges against the "seller", as it seems he may not even have legal right to sell the house and property. The title company missed it, the brokers and realtors all missed it, and when I inspected the title I really didn't know what I was looking at, and thought that if there were any problems that those imminently more qualified than I would have caught it.

Not so! We are dealing with two brothers, an older brother (The Money Man) is the last owner of record, and the seller (Contractor/Homebuilder Brother), whose company is incorporated, was owner of record who transferred ownership to his brother. (I'm still scratching my head, I need a chart to keep track of this stuff, I swear.) IF Money Man Brother is part of the corporation, then no worries. If not.....

In any event, we are waiting to file the lis pendens because now that my fiance and I have hired a lawyer, all of a sudden there are many people who are very concerned that we should get what we have put up thousands of dollars in earnest and have been asking for. We've agreed to give the parties in question 25 hours to come up with the proper documentation and paperwork (and that time has now passed) in order to prevent our filing.

During this time I brought up the issue of our realtor's commission, and it seems that should we actually be able to sue for specific performance, and should we win, she can receive her commission out of the seller's pocket. If this problem of title persists, then I believe she'll have to seek recourse on her own, but would have quite a strong case to sue for damages.

IF he does not have legal right to sell the property it appears at this point that we'll all either have to "get in line" after the District Attorney/state brings him to trial, after which we can go after his assets, or, the state might seize his assets and would then reimburse us accordingly. This would not allow us to purchase what is turning out to be a very unique home in this area, but it would allow us to afford higher-priced housing that could be modified to meet our needs.