Question #1

Question:

I signed a contract to sell my house with a real estate broker, who located a potential buyer. The deal fell through when the buyer couldn't complete the transaction. There’s a chance that this buyer might clear up his financial problems and be able to buy my house in a few months. If I let my listing agreement with my broker expire but go ahead and sell to this buyer, am I obligated to pay the broker a commission?

Answer:

There’s a simple answer to your complicated question: Read your listing agreement.

Typically, such an agreement provides that any consummated sale with a prospect located by the broker results in a commission for the broker. If the buyer was identified during the listing period, a sale occurring after the listing period expires still requires that a commission be paid.

It always is important to read documents associated with the complicated process of buying and selling real estate. You want to know what your obligations and responsibilities are before you proceed, not figure them out after it’s too late.

question date: 11-11-97

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Question #2

Question:

I put my house up for sale and got an offer from a serious buyer right away. After some back-and-forth negotiations, I accepted a $311,000 offer. Almost immediately, another offer for $323,000 was submitted. Can I back out of the first deal and accept the better offer? What are my options?

Answer:

It depends. You can only accept the better offer if you don't have a binding contract with the person who offered $300,000. Under law, a binding contract exists when you have an offer, acceptance and consideration. If, as it appears, you accepted the first offer, you're probably stuck with it.

If you attempt to rescind the contract to sell at $300,000, the person who lost the house can sue you. A judge could compel you to sell the house as agreed at $300,000 to the spurned buyer. The judge also could award damages.

If you have an apparent contract, you might keep the second offer in reserve. If your escrow falls through because the buyer can't get financing, for instance, you then would be free to accept the second offer.

question date: 9-22-98

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