Laws and Selling Your Property
If you have ever sold a property before, you can understand the stress that goes into the process, and especially with larger deals, the amount of negotiation that goes into those deals as well.
We recently had a transaction we were working on that started to cause us some real problems, so I wanted to go into that transaction a little bit and show how knowing the laws could really help in certain situations.
This was a commercial transaction that also had two residential units attached to it. We had the property in contract at a specific price and opened escrow. A major issue we wanted to get out of the way originally was the issue of repairing any items, therefore we had a separate addendum signed that only stated the property was to be purchased as is.
As we go through escrow, and start getting into the Buyer inspections the Buyer realizes that the property is in pretty bad shape due to it being vacant for many years before hand. This is when things start to fall apart. Our contingency period comes up, and they had not removed their contingencies, which originally was okay because it took a few extra days to get them the disclosure packet than it should have, so we let it slide.
Next thing we know, we receive a counter offer stating that the Buyer would like the price dropped 22%! They are stating the Seller was negligent and the Agent was hiding facts about the property. The Seller naturally turned down that counter offer, and the next day we get an email from the Buyer with a list of 12 complaints threatening, this, that, and the other. In this email from the Buyer it clearly states that she would like her deposit back immediately that, in effect, would be a cancellation of the agreement, so as the Sellers representative we sent a cancellation of contract.
Of course when this goes out the Buyer then backtrack-and says they still want the property but at a slightly higher price this time, and when told no again, they come back and offer once more a slightly higher price which is rejected again. Now we are two weeks past the time the cancellation was turned in and the owners of the property are starting to get upset that this Buyer is holding up the transaction.
The biggest discrepancy in the cancellation was that the Buyer wanted to be reimbursed for their home inspection fee, but when asked what the fee was, they changed it from a few hundred dollars to a slightly larger amount. Due to the Sellers age, I took on the responsibility of making sure that the utilities would be on for inspection, and after calling the appropriate companies we were assured that those utilities were on, however, when the inspector went out it was found out that those utilities were in fact only partially on. So I took responsibility of not having the utilities on correctly and told them that I would pay for the original home inspection fee but would not pay for the re-inspection fee because they knew the condition of the property and still called out the home inspector. Even so, there was no signed cancellation or response.
The next steps became very interesting because now I reached out to a mediator to contact the Buyers agent and hopefully speed up a response, but we also have a new form that we use that will demand a close of escrow or will allow the owner to cancel the contract without a counter signature. So those are the next two ways that we went, and hopefully this will result in the transaction being fixed, but now my reputation with this Seller is damaged because of the oppositional attitude and lack of negotiation on the Buyer’s behalf which is unacceptable to me, however, now we have a way to close the transaction.
The Best Part
In the Buyers email they had originally stated approximately 12 complaints that they had about non-disclosure on our side. I went through those complaints and was able to find evidence to the contrary on every single item, which we will be turning in to the mediator. This is all because we knew the law and followed the law, and when people start to threaten lawyers, etc. it just becomes very unprofessional, but that is just how some people are.
To top everything off, one of those complaints was that the Buyer was not presented with the listing agreement which has never been asked for by a Buyer before, and the only reasoning we could think of why the Buyer would want the listing agreement is to wait until it was expired and go speak to the Seller directly which is even more unprofessional especially because the Seller directly stated that all communication should go directly through me as their agent.
This is why it is good to know the laws in the fields that you work in and follow those laws as much as possible.
Until Next Time,