Realtor/Lender Problem Legal Action?

Question

Selling house to move to another state. Offer was accepted over 30 days ago based on buyer preapproval. The entire time we have been reassured by both lender and realtor that there are no problems w/ financing. Now 2 days before we leave buyer may not be approved. We have obtained information that this problem arose over 2 weeks ago and we were never notified nor were arrangements made for a contingency plan (continuing to show/line up another buyer). Now the lendor and realtor are both pointing fingers at eachother stating that eachother dropped the ball. Do we have any leg to stand on? We feel that it is the realtors obligation to inform the seller of potential problems and work with them to come up with other options.

Answer 1

Yes, you have two legs to stand on. First, I suggest you contact the head honchos in the two institutions and let them know they need to meet with you and the other party together NOW or you will begin legal action. They both were obligated to notify you, however the job usually goes to the realtor since they are in charge of all the arrangements of the sale. Make it clear you mean business, you want restitution for you time, inconvenience and any financial outlay on your part. That should get them moving. I also suggest you have a 15 minute free meeting with a real estate attorney that knows what they are doing. Let them know in a nut shell what happened and let them know what you intend to do and that you may want to retain them should the meeting not go to your liking. Make sure to tell the parties you meet with you have had a meeting with an attorney, that should wake them up. Good luck, you have the law on your side within your contract with all the parties.

Answer 2

Depending on the contract that was drawn up, you may not be entitled to anything. I used to work for a Real Estate Agent who did everything to get a house to settlement. We even arranged financing for other agent's clients whose financing fell through. The woman that we used would get them good deals and get them to settlement within a couple of days.

Your agent should have been following up with the buyer's lender and agent throughout this process to make sure that everything was running smoothly. Your house should also have remained on the market with a contingent contract so that other potential buyers could still look at it. Sometimes there are shady lenders who tell people that they'll be approved and everything's fine and then at the last minute switch terms around and tack on exorbitant junk fees. This is why buyers should use local banks or well known mortgage companies that they can sit with and talk about their loan.

The last few days before settlement are always stressful and it is possible that the buyer will be able to get financing before closing but if I were you, I wouldn't hold my breath. Unless your current agent has done a bang up marketing campaign and has good follow up skills, I would drop them and go with someone else. Look for the agent who has the best ads in the newspapers and the most signs up in your area and then interview them to make sure that they're easy to deal with. Good Luck.