Novice home­buyer’s first at­tempt dis­ap­point­ing

The Progress-Index - At Home - - DEAR MONTY - DEAR MONTY

Reader ques­tion: We are first­time home­buy­ers. We are also young and un­in­formed. Our agent is my aunt who was preg­nant and due at any time. I found a house I re­ally liked, but she couldn’t show it be­cause of her con­di­tion. I had the agent from the of­fice that had the house listed show the house to my hus­band and me. We were asked to sign pa­pers to make the agent our agent. We de­clined, think­ing we would not be ob­li­gated.

We de­cided we wanted to make an of­fer. She wrote the full price of­fer and sub­mit­ted it. We got a call from the agent that showed it to us. He was up­set and said we were to make the of­fer with him be­cause he showed the house to us.

Two days later we were told our of­fer had been turned down. When we in­quired why, they said that the own­ers had ac­cepted an­other of­fer. It seems they ac­cepted a con­tin­gent of­fer as the other buyer needed to sell their house first. Is it pos­si­ble that they would take a con­tin­gent of­fer, and not a full price of­fer? We have not re­ceived any pa­pers yet show­ing that they de­clined our of­fer. I feel that it was be­cause of the mix-up and I am just sick. I re­ally want this house. What can I do to fix this mess? How can I tell if they have done this out of spite? We need your help! Jayne and Ja­son B.

Monty’s an­swer: Hello, Su­san, and thanks for your ques­tion. Even with the de­tail you pro­vided there are key facts miss­ing to al­low you a de­fin­i­tive an­swer. It is pos­si­ble that you in­ad­ver­tently are in­volved in a “procur­ing cause” sit­u­a­tion be­tween two agents about who pro­cured the buyer, and sub­se­quently, who should be paid. If the po­ten­tial for a procur­ing cause con­flict is the rea­son the agent en­cour­aged the seller to ac­cept an­other of­fer, the agent is vi­o­lat­ing the Re­al­tor code of ethics and the law if they put their own in­ter­ests ahead of the seller’s in­ter­ests.

Many fac­tors in­flu­ence sell­ers rea­son­ing

Your fear may not be the rea­son they did not ac­cept your of­fer. There are many other pos­si­bil­i­ties that are most likely. For ex­am­ple, what if the con­tin­gent buyer agreed to pay a pre­mium over the list price to in­duce the seller to ac­cept their con­tin­gent of­fer? What if the con­tin­gent buyer and the seller have a re­la­tion­ship, like fam­ily, or co­work­ers? Or what if the seller val­ues the ex­tra time to move out a con­tin­gent of­fer may pro­vide? It is all spec­u­la­tion and you may never know as the seller is un­der no obli­ga­tion to ex­plain their mo­ti­va­tion to you.

Procur­ing cause pro­tec­tion

When you spoke to your aunt to

re­quest the show­ing did she ex­plain to you that be­fore you went to the home with an­other agent that to pro­tect her com­mis­sion, you must dis­close up-front your aunt was your agent? If she did tell you, did you fol­low through? It is that up-front dis­clo­sure and ac­cep­tance by the other agent that should pro­tect your aunt’s com­mis­sion. If your aunt failed to in­struct you prop­erly then she suf­fers the con­se­quences.

Write a backup con­tract

If the seller has ac­cepted an­other of­fer there is not much you can do un­less the con­tin­gent home fails to sell. You can write a backup of­fer now and wait to learn if your of­fer be­comes pri­mary. While there could be a dis­pute about which agent col­lects the fee it would be among the agents.

You may be able to find a bet­ter house be­fore know­ing if you have an­other shot at this one. Many sec­ondary con­tracts are writ­ten to al­low the sec­ondary buyer to re­scind the con­tract if an­other home is iden­ti­fied be­fore the pri­mary con­tin­gency is re­moved. If you wait, and the con­tin­gent home sells, you will have lost time wait­ing.

You did not men­tion a pre-ap­proval let­ter from a lender. This is an­other big rea­son a seller will fa­vor one buyer over an­other. Here is a chance to get your­selves in­formed. Go to­ing. This page out­lines the en­tire real es­tate process that you will go through buy­ing a home. By fol­low­ing the click­able steps and learn­ing about each step be­fore you get to that step, you will be far less likely to en­counter prob­lems. The prob­lem you just ex­pe­ri­enced is a small prob­lem com­pared to oth­ers you can en­counter. Richard Mont­gomery gives no-non­sense real es­tate ad­vice to read­ers’ most press­ing ques­tions. He is a real es­tate in­dus­try vet­eran who has cham­pi­oned in­dus­try re­form for over a quar­ter cen­tury. Send him ques­tions at

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