This year has been a hectic one in real estate. All the brokers have been telling me there is nothing on the market and when a house is put up for sale it goes almost immediately. This has led to some problems for Purchasers, who sometimes lose a house they thought they had. I’ve had several questions regarding just this issue, so I thought they might be of interest to everyone.
WHEN DO I REALLY HAVE A DEAL?
I saw a house last week and made an offer that the Seller accepted. I had an inspection by an engineer, contacted an attorney and was ready to sign the contract the Seller’s attorney had sent to my attorney. Then I was told the Seller took a higher offer. How could this happen? What are my rights? How can a Seller tell me I can buy his house and then sell to someone else?
When a Seller and Purchase have come to what is called a “meeting of the minds,” meaning al terms and conditions, including price, closing date, personal property included or excluded in the sale, financing and any and all material matters involved have ben agreed to by all parties, many Purchasers believe the house is theirs. Not so. Unless the Seller has signed a Binder or Contract, there is no obligation on his part to sell to the Purchaser. This is because of something called “the Statute off Frauds,” which makes certain agreements unenforceable without a signed writing. But even if the Seller did sign a Binder or Contract, and then the Purchaser changes any of the terms, the Seller is not obligated to go through with the transaction.
Purchasers often attempt to renegotiate a deal based on the findings in an engineer’s repot. In a market as hot as this one has been, that can often give the Seller an out he will quickly seize because he has had higher offers since he agreed to take the first one.
Your only recourse may be to have the Seller reimburse you for the cost of the engineer’s report, but even this may not be the case, since it could be found that the risk of that cost was on the Purchaser.
WHAT DOES AN “ON OR ABOUT” DATE MEAN FOR THE CLOSING?
Actually, it means just what it says. “We may close on that date, but then again we may not.” In this area it is the custom to put a date in the contract that is tenuous at best. The Purchaser and Seller would like to close on that date, but there are no penalties to either party if the closing does not occur then, as long as itoccurs within a reasonable time of that date. A month has bene found to be reasonable under most circumstances.
Consequently, unless a contract states, “On or before, time is of the essence,” parties to a real estate sales contract in these parts cannot be sure of the closing date until the very end of the transaction