We completed a contract to purchase a home. Our agent did not mark the financial contingency box as we had our financing all approved. We were told the payment amount before we made the offer. Once the offer was accepted, the payment amount came back substanially higher. The broker had made an error. Now we can't afford the house and the seller is threatening to sue us. State of home purchase is WI.
2006-09-29 13:17:04 · 6 answers · asked by Robin615 1 in Business & Finance ➔ Renting & Real Estate
It's not that we can't qualify with the higher payment, its that we would never have offered to purchase had we been quoted the higher payment in the first place.
2006-09-29 13:29:59 · update #1
I hold a real estate license in Wisconsin. you are in a sticky situation. Your agent messed up. big time. Unfortunately the Seller has every right to sue you and force you to purchase the home. If i understand correctly the agent left the financing contingency blank. He/She should have filled that in with the interest rate, house payment, and other info from your pre approval. that way when this situation arose you would have legally been able to back out. If i were you I would got to the manager or owner of the Real estate company, tell him/her the situation. See if you can't work out a compromise between you and the sellers. If an agreement is unreachable you will be forced to buy the house. If that's the case put it right back on the market, and hope that you get a offer soon. In the mean time I would sue your Broker. They obviously did not explain the contract to you correctly. I hope everything turns out OK. If you want legal advice their is a number in the phone book for free Wisconsin legal aid. they should also be able to help you with your options.
Good Luck
And what that guy said up there, you will lose your earnest money, but if you are able to get the financing, and not able to afford it, doesn't matter, If the contingency was left blank then you will be forced to buy the house.
2006-09-29 13:46:29 · answer #1 · answered by jelly 3 · 0⤊ 0⤋
Your legal ramification can be two fold. You need to look at the find prints in your contract carefully under "Buyer default" and under "damages". There are two kinds of damages, specific (or liquidated) damages and/or non-specific (or un-iquidated) damages.
If you did not check the financing contingency box and you cannot close, regardless whether it was because of you or your agent, you default. You will most likely lose the good faith deposit. That is the liquidated part of the damage.
In some contracts, it may also says that the seller can seek specific performance. That means they can go to court and force you to buy it. But going to court may take a long time. The seller most likely wants to get out a lot sooner than that.
The seller may sue you for un-liquidated damages which means the remedies of default have not been agreed upon in the contract and it is up to the judge to award the amount. In most cases, the loser also is responsible for the winner's legal fees and court costs.
Your options, close the transaction if your down payment is substantial because you would most likely lose in court and you will most likely end up with a huge legal bill.
Don't close and leave the depost if the amount is small. However you should "NOT" do that unless you have a mutual release between you the seller and all the agents. This prevent you from being sued afterwards.
If you discussed with the agent before the contract was signed and mentioned to them that the financial contingency is not necessary, the agent is cleared of any wrong doings. If not, the agent may be guilty of neglegence and or misrepresentation. You can file a complaint with the Real Estate Commission in your home state. But that will not get you any money back. You can sue the agent and his broker in the civil court for neglegence. You should talk to an attorney and the broker/mamager of the comapny. May be they will forgo their commissions instead of a law siut.
A word about law suits... they are costly and time consuming. No body wins. Worse of all, the brokers have an insurance called Error and Omissions insurance. Once the case gets into ligitation, the insurance takes over and you are the one fighting against it. Sorry...I feel bad I don't have any quick fix for you.
2006-09-29 22:38:16 · answer #2 · answered by robert S 4 · 0⤊ 0⤋
the seller can sue all they want. if you cant get the money to complete the sale their not going to get it so why should they bother. besides it was the brokers mistake that you were relieing on so most courts would throw the suit out. about the only thing you will lose is any earnest money you put out.
2006-09-29 20:22:01 · answer #3 · answered by george 2 6 · 0⤊ 1⤋
Not being familiar with the state of Wisconsin's laws, I'd suggest that you look into suing the broker, for malfeasance.
2006-09-29 20:25:09 · answer #4 · answered by Beau R 7 · 0⤊ 0⤋
Only youre deposit thats it I know it sucks but hey its better than eating crap for 10 years. STAY AWAY from ARMS they are horibble sure it sounds nice but get a high fixed and stick to it
2006-09-29 20:23:01 · answer #5 · answered by jim n 1 · 0⤊ 1⤋
sorry. you could lose your deposit.
try different financing options.
2006-09-29 20:19:48 · answer #6 · answered by bunny2112 2 · 0⤊ 1⤋