The sellers wont signed the release of our escrow from a house we decided not to buy? please help!?

Question

we wanted to buy a short sale home and we had a home inspection contingency. after the home inspection we found out thatThe house had structural problems and we decided not to buy it. We wanted to withdraw it right away but our realtor didn't do the paper work till three days later then we ask him to. The seller's attorney is advising the sellers not to sign the realese form and they are saying that we didn't stay with in our 7 day inspection period. Our realtor had a lawyer send them a letter but they are not stepping down. Our realtor start saying that it is our problem she doesn't want to deal with it. What can we do? Our realtor supposed to do the paperwork on time as we requested but she didn't. Now there are possibly two contracts on this house. Can they sell the house and still keep our escrow? What can we do about this and about our realtor? Do we have a case against our realtor? Any suggestion?

Answer 1

I hate to tell you, but the seller's attorney is correct.

If your contract called for the inspection to be completed and a repair request to be sent over in 7 days, and your Realtor didn't comply with that request, then you VOIDED your right to an inspection, and are required to close on the home.

Leave the money in escrow---for now.  It will stay that way forever until either both of your agrees who keeps it or a judge decides when one of you sues.

The person you need to sue is your Realtor who also abandoned the transation.

You have an EXCELLENT case against the Realtor.

Not only should you sue in court but file a complaint with BOTH the Real Estate Commission (this is who issues the license) and the Board of Realtors (this is who owns the MLS we join and regulate our ethical practices).

PS:  A bank is NOT going to send a letter of loan denial just because you say that you can't pay the loan.  That is REAL ESTATE FRAUD and the sellers can sue the bank for generating a falsified document.

The underwriter will ask you the following questions, which you are LEGALLY obligated to answer truthfully:

1.  Have you lost you job?

2.  Has your credit changed?

If you answer to both of those questions is no, then chances are, your loan isn't going to be denied...ESPECIALLY if you were already pre-approved.

If your financing has already been approved, you are SOL, and the seller's attorney and Realtor, I can assure you, KNOW about these types of things that people pull illegally.

Answer 2

It sounds like you have one really, really bad realtor - to hear from you that you are dropping the contract but then not get the contingency to the seller within the contingency period is a major error on their part.  

If this is really how it played out and you really didn't get the contingency to them (sellers) in time then they are within their rights not to release the contract.  Still if they have a second offer that may be great news for you, they will have to release you to accept the new offer.

About your situation, is there any other way out of the contract.  If you have a financing contingency you could call up the bank and tell them you won't be able to pay them back - then watch them drop your financing (like a red hot potato) and you can use this contingency.  

Also, I'd call the agents broker (ie their boss) and talk to them about this (he probably doesn't know how badly the agent messed up).  Tell them you have been talking to a lawyer about this and the lawyer said you should sue your agent (which is probably what a lawyer would say).  Also ask them for the number to the board of realtors as the lawyer said you should file a complaint with them (and you can file a complaint there is they don't react to this).  See if getting the broker involved doesn't get this moving along quickly.

Anyhow, there are probably still several ways out of this (financing contingency, they release due to another contract or agent covers the lost escrow due to this being their mistake) but it make take some time to get released.  This sounds like your agents mistake and they wil have to eat any lost money worst case (possibly unless they outright lie about the dates).