Sticky realtor situation

General Real Estate Investing
1

I’m trying to help a friend in a mess he’s gotten into while trying to buy a home, and admittedly its a bit more complicated than I can handle, here it goes:

He found 2 houses he really likes, both in his price range, so he put in offers on both of them.
He REALLY likes house B, and kinda likes house A.

Seller A countered his offer, he countered back, and they accepted his counter on a Saturday.
Seller B accepted his offer outright on Friday of that same week.

Agent of seller B notified my friends agent on Friday afternoon by voicemail that sellers had accepted his offer. Herein lies the problem, my friend’s agent claims they never received the voicemail from the sellers agent, so they didn’t know that the offer had been accepted.

Meanwhile, my friend went ahead and signed the purchase agreement and mailed his EMD to seller A, all before he found out about the accepted offer from seller B.
Seller A won’t let him out of the contract now without sacrificing $3K in earnest money and my buddys pissed because he really wants house B, not house A! So now he’s got an accepted offer on the house he really wants, but is already obligated to buy a house that he doesnt really want any more!(I know a lot of this hinges on the specifics of the contacts themselves)

Trying to decide if theres any fault here on the agent who supposedly left a voicemail notification of accepted offer, or with the agent who claims they never got that voicemail, or just a series of unfortunate timing of events?

2

Jake,

There should have been an option period in the contract that allowed your friend to walk away from the deal. It sounds like your friend needs to talk to his realtor and figure out what happened. In addition to that the seller of house A can’t just keep your friends EMD. What if he can’t get a loan? What if the house won’t appraise? There are lots of reasons that home sales don’t close. The earnest money should be held at the title company, not with the seller. It sounds like your friend’s agent is a moron.

3

This is where an inspection clause will come in handy. Tell them the toilet is on the wrong wall and it won’t pass for me. Sorry gimme back my money.

4

My friend doesn’t believe that he has a separate EM dispursement agreement, so what decides what happens to the EMD if the transaction fails to close? is it whatever the purchase agreement says?

ps-in my state, EM is held in the broker’s trust account (which is where my friends $ is currently parked), not at a title company

5

There should be a financing agreement in place as well. If financing cannot be found then the EMD goes back to the buyer. Just have your friends broker send him a decline letter. That should work.

6

Thx alot chris.

7

No problem. If the seller tries to strong arm your friend into using his mortgage broker make sure your friend refuses.