unconditional house sale may fall through. Agent keeps commission?

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#2494315 29-May-2020 12:53

concordnz: Its clear that the OP has only given us 1/2 the story - from that Lawyers email - there was clearly a previous exchange (and allueded to here), where the OP is accusing Harcourts of attempting something 'underhand'

In my view, the Lawyers email was perfectly acceptable - particularly in light of what the OP has failed to disclose to us,
and it was right for the Lawyer to suggest he pull his head in.

The only thing missing is an email with I started this thread with, the lawyer notifying me with a PDF from Harcourt. Withing 5 minutes of getting the PDF, I sent the email shown

If you choose to believe it or not, it's your prerogative.

kingdragonfly

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#2494319 29-May-2020 12:59

concordnz:
Morally I find the OP's behavior / strategy extremely unethical, dodgey and Low.

It appears that the OP is more interested in doing everything he can to 'force' the deal to fail

You're correct..

It was my plan all along when I accepted a lower $18,000 lower unconditional offer, instead of the higher "conditional on financing" offer.

I knew the purchaser didn't have the cash as he stated, and decided to play the long con game, to get hold the the deposit.

I walked up to the purchaser, twisted his arm, and said "either sign this legally binding document, or I'll break your arm.

Personal responsibility is for fools! Don't worry about abiding about the contract conditions.

If anyone asks, say you were paying in cash.

Just between you and me, I don't really need the money. Just pay at your convenience."

How could you have discovered my devious plot?

Batman

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#2494334 29-May-2020 13:22

question. has the purchasers called off the contract? i thought the penalty for late settlement is 14%pa or something close. if late settlement attracts penalty, at what stage is the contract called off (assuming the purchasers at no stage agree to cancel the contract and kiss goodbye to 60k)?

kingdragonfly

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#2494346 29-May-2020 13:35

Don't know if this is the whole story, but from Consumerprotection

"Generally, once you make a contract or accept a quote, you can’t change or cancel it without the other side agreeing (if you do, it's called breach of contract).

You can only break a contract or agreement if either:

there is a termination clause with the right to cancel in certain circumstances
there is a variation clause — but sometimes only the supplier has the right to vary the contract
it's a contract with a cooling off period during which you can change your mind, eg a layby, or an uninvited direct sale like a door-to-door sale
If you have signed a contract for a subscription service for a fixed period of time, eg gym membership, you might be able to transfer the contract to another person, if the terms of the contract allow for transfer. You might have to pay a transfer fee. The person receiving the transfer must agree to meet the contract terms.

If none of these circumstances apply, you might still be able to change or cancel the contract if the other party agrees. You may have to pay a cancellation fee.

A lawyer can speak to how you'd back out of a unconditional contract.

My parents, and many others, have told me signing a contract is serious, and it's not something to be done lightly or quickly.

dejadeadnz

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#2494358 29-May-2020 13:55

This thread is not a good reflection upon a few people who have taken absolutely morally and legally unjustified potshots at the OP. For all the high and mighty idiots who are calling the OP unethical: will you do free labour for other people in general? If not, then why should the OP be forced to suffer the detriment of going through all the hassles, time and costs of a potential failed sale and not be entitled to call up the deposit as both parties freely agreed to in signing the S&P? And he asked a question about the real estate agent's fees: the correct answers have been provided and this seems to have been accepted. The OP also asked their lawyer to provide legal advice on the S&PA as to their future options on possibly the most important transaction of their life, which is an entirely conventional and legitimate question that a reasonable lawyer ought to answer, as judged by an actual lawyer. Which one of you have the requisite professional knowledge and standing to debate any of that last point?

It's time some Geekzoners got real: most of you know absolutely nothing about the law and what you have to say about it is about as meaningful as an average speech by Trump. Significant numbers of people who have "participated" in this thread are hypocrites and struggle with basic comprehension. Some of you who are unjustifiably calling out the OP as a liar with the usual "There's more to the story" crap (looking at you @concordnz) is just being abusive.

meesham

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#2494369 29-May-2020 14:24

The purchaser isn't a victim here, they won the sale because they could offer an unconditional sale, for the OP the $18K reduction in price was worth not having to risk the buyers backing out due to a condition (and I would have done the same thing). The purchasers took on the risk so that the house would be theirs, if they didn't actually have cash then they need to live with the fact that they took this gamble to win with the best bid. If the purchasers' lawyer didn't make clear to them that they risked losing their deposit then that's something they need to take up with their lawyer, the OP isn't responsible. Extending the deadline is a risky proposition at the moment with people not wanting to spend money, and the longest the OP waits the riskier it could become that they don't find another purchaser willing to spend around the same amount. I would be getting my agent to go to the original top bidder and seeing if they've bought elsewhere yet.

As for the estate agent, their job is to get a purchaser to sign on the dotted line and get their best outcome for the seller - which is what it sounds like they've done so I think they should get their payment. Whether estate agents deserve such a large cut is a separate discussion.

darylblake

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#2494371 29-May-2020 14:30

wellygary:

elpenguino:

Small bonus for you while your agent chases your other two bidders....

And then gets to clip the ticket as it goes round the second time..

To be honest, I hope your first offer comes through, and the $61K deposit is a pretty big incentive for them to do so...

...but with COVID turning the economy upside down they may have had a change in economic circumstances impacting their ability to borrow...

From a few real estate agents I have spoken to its usually quite uncommon for the purchaser to entirely forfeit their deposit. Yes some get pushed out, but the penalties are quite high so fingers crossed it goes ahead.

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Froglotion

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#2494372 29-May-2020 14:35

dafman:

To be clear, it was the OP took it off the table by not agreeing to an extension request for a couple of days, which would have been the logical thing to do if they were genuinely after a quick and easy sale.

Not really, not getting an extension doesn't mean the transaction won't go through. It can still go through, they just aren't giving the buyer a free pass to mess them around at will. Accepting an extension does in fact take the quick transaction off the table. If they are going to be forced to wait a period of time, they may as well either force the sale with the original buyer, or offer it back to the market in the hope of getting more money (which was offered previously).

There is no right or wrong way to proceed. It is solely the OP's call as to what they do. They shouldn't be berated for making a choice that works for them. We are only bystanders.

dejadeadnz

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#2494376 29-May-2020 14:45

Froglotion:

There is no right or wrong way to proceed. It is solely the OP's call as to what they do. They shouldn't be berated for making a choice that works for them. We are only bystanders.

More than that, the options available to the OP were willingly signed on to by both parties. The OP didn't put a gun to the buyer's head.

kingdragonfly

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#2494379 29-May-2020 14:52

Thank you.

You are correct.

I wasn't happy that the agent was getting a significant chunk of change for a sale.

Not because I want it, but because I believe real estate agent are overpaid, and frankly talentless leeches.

My guess is for 8 hours work the agent got over $19,000. The moment the deposit appeared in their account, they extracted their pound of flesh, well before I saw a penny.

Obviously I'm paying for Harcourts reputation and visibility also, beyond the hours worked.

To add to my aggravation the buyer is now insisting there's rubbish in the unfinished hidden area under the house, and insisting that it be removed. Of course he waited till the day of settlement to bring this up.

Slightly off subject, I get annoyed by time wasters: good deals come quickly, bad deals get dragged out. Once someone get an extension, you get a "give them an inch, and they take mile" situation quickly.

Within a week of the sale, I had an previously unnamed prospect who asked 10,001 questions, and then didn't make an offer, even though I offered it for $30,000 less. Again I would have happily taken that deal also.

Anyhow still waiting to see if the deal goes through, which I honestly want it to be over.

I consider myself very lucky in these times that I don't have to worry about money or my retirement. I feel a bit of survivor's guilt.

That @concordnz thinks I'm a mustache twirling hand wringing villain to me says more about their mindset than mine.

\

Handle9

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#2494383 29-May-2020 15:00

concordnz:
Morally I find the OP's behavior / strategy extremely unethical, dodgey and Low.

It appears that the OP is more interested in doing everything he can to 'force' the deal to fail,
Believing that HE will recieve 100% of the $61,000 Deposit, as "free money"

And he has his nose out of Joint because the RE agent (perfectly fairly),
gets their commission, for getting a signed contract.

I think the OP is simply being greedy, (and quite nasty, trying to make someone 'lose' $61K)
and quite raceist, on the basis that he 'believe's' the buyer is not a New Zealander.

kingdragonfly: You are correct sir. I was laid off.

However I did find a lower paying job, outside Wellington, so I'm grateful for that.

I moved without an employment contract, which was pretty risky, and a little stupid. But it worked out.

Does everyone else see the Irony,

The OP condems the Purchaser for not having everything sorted (in a time of pandemic where bank rules are changing daily),

Yet, he is prepared to do exactly the same thing himself, that the OP did.
(and i bet if that hadnt worked out for him - he would be on here complaining bitterly about how 'unreasonable' people were - and how they should be more understanding in such a 'difficult' time...)

For those that are totally unaware - (which is most peopel)
Pre-Approval, does NOT guarantee the banks WILL provide finance.
I myself have been in a similar situation, - (Pre-approval letter from the Bank isnt actually worth the paper its written on)

(its complicated - but pretty much - Finance Approval only gets done after the bank has done 'due diligance' specific to property being purchased. - irrespective of what your Pre-approval was - the banks can reduce or alter what they will lwnd you - after you have signed the Sale agreement, and sent in all the paperwork to the bank for the actual Mortgage)

Personally I find what you've written ignorant judgemental nonsense.

Clearly you are a close personal friend of both the op and the purchaser to have such clear knowledge of the motives and circumstances.

dejadeadnz

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#2494389 29-May-2020 15:11

Handle9:

Personally I find what you've written ignorant judgemental nonsense.

Clearly you are a close personal friend of both the op and the purchaser to have such clear knowledge of the motives and circumstances.

It's the sad norm: the less some people know about an issue, they more willing they are to spout off about it.

Handle9

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#2494399 29-May-2020 15:23

dafman:
Froglotion:

... They wanted a quick and easy sale so accepted a lower offer to get that. That has now been taken off the table and you're calling them greedy for not wanting to be out of pocket ...

To be clear, it was the OP took it off the table by not agreeing to an extension request for a couple of days, which would have been the logical thing to do if they were genuinely after a quick and easy sale.

From the outside looking in, I can't help but think the OP saw opportunity to profit from the misfortune of someone else. ie. take their deposit and re-market the house.

- Was the OP legally entitled to do so? Yes.

- Would everyone do the same if in similar circumstance? No, another seller might choose to work with the purchaser to try to settle per the original contract.

(and to then seek to claim the commission component of the foregone deposit as well ...)

You must be such a close friend of the OP to know all their motives and circumstances.

That or you're just judging from a position of total ignorance.

antonknee

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#2494401 29-May-2020 15:27

Is it unfortunate for the purchaser to lose their deposit? Yes. Is that what they agreed to by making an unconditional offer? Also yes. Does that make OP unethical? No, I don't think so.

If it was me I would definitely consider how much keeping the deposit would effect the other person; but I would also consider how much of a headache and potential financial loss it's caused me, plus potential losses based on turning down other offers. There is room for empathy when considering what is ethical, what is legal, and what is reasonable. But that need for empathy doesn't solely apply to the purchaser.

I doubt either OP or the purchaser are coming up with conniving schemes to do the other one over (ie OP is not unfairly looking to keep the deposit and the buyer probably wasn't trying to pull a swifty by wrongly making an unconditional offer). Sometimes deals fall through, and sometimes there are consequences to that.

Also don't forget the original question was whether the real estate agent should keep the commission on the fallen through sale. I don't like real estate agents (or indeed most involved in the property sector, images of leeches and other parasites come to mind) so my first thought is no, and definitely not that much $$$. But the reality is legally and ethically yes - they did do some work in getting a sale, not really their fault it fell through.

frankv

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#2494411 29-May-2020 15:49

antonknee:

If it was me I would definitely consider how much keeping the deposit would effect the other person; but I would also consider how much of a headache and potential financial loss it's caused me, plus potential losses based on turning down other offers. There is room for empathy when considering what is ethical, what is legal, and what is reasonable. But that need for empathy doesn't solely apply to the purchaser.

Yeah, there's extenuating circumstances in that the covid-19 thing occurred, which perhaps affected the purchaser's ability to get a mortgage or whatever. There's also the opportunity for some kind of new agreement to be reached which both seller and purchaser are happy with. e.g. the purchaser adds another (say) $10K to the deposit in recognition of the hassle they have unwittingly caused, and gets (say) another week or two to complete the sale. Or whatever variation on the original contract both sides are happy with.

But, if no agreement is reached, the bottom line is that the seller gets to keep the $61K, less the agent's fee, but has to go through the hassle of finding another buyer.

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