unconditional house sale may fall through. Agent keeps commission?

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#2494080 29-May-2020 08:09

If I might add, never ask the real estate agent if they know a lawyer.

Imagine if you're arrested for a serious crime and you ask the prosecuting lawyer if they know a good defense lawyer.

I'm not sure how you find a good property lawyer, but I'm finding my lawyer suggested by Harcourts is a little too cozy.

For anyone who cares, my advice is one of your first questions should be "Any relations, interests and dealings with my real estate company?"

I sold a house in Hamilton, and again made the same mistake of asking the realtor for a lawyer.

After I hired him, I found out 'my' lawyer was representing the real estate agent also, which he didn't disclose till I asked.

Back to this Johnsonville sale, here's an email from just my current lawyer.

Me: Should Harcourt's be pulling their commission before the sale has settled?

I thought the sale could still fall through, if the buyer is unable to settle (pay the remaining balance).

Just a lawyer: Yes, legally that is correct.

The sale is unconditional so the deposit is collected by them at that point and then their commission is deducted prior to vendor being paid the balance.

Technically, even though settlement hasn’t occurred, the property is ‘sold’.

If the purchaser failed to settle, the deposit is forfeited, so Harcourts get to keep their commission and you get to keep the balance.

Me: So if it falls through, they get a second commission on the second sale?

Just a lawyer:You need to calm down.

Harcourts have, as always behaved professionally and perfectly within the law.

They have not ‘attempted’ anything underhand at all.

All agents deduct their commission from the deposit I am not certain why you are so focussed on your sale not settling

I really don’t think I need to be having this conversation with you but if you are concerned about what might happen in the unlikely event of your purchaser failing to settle then my suggestion is that you contact the Manager at Harcourts Johnsonville.

You asked a ‘what if’ question and I answered it. I don’t think it serves any useful purpose to explore all possibilities unless strictly necessary i.e. your purchaser fails to settle.

Notice quotes around 'sold.' Call me crazy but I don't think there's a legal concept of 'sold' in quotes versus sold without quotes. I guess I can tell my creditors I'll pay my bills in 'money'.

Because why ask my property lawyer about the property law? I should always assume the best outcome, and not ask about the worst case.

billgates

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#2494085 29-May-2020 08:41

Wow. I see you what you mean @kingdragonfly about this lawyer if that is truly how the conversation went. Their response to your second commission on second sale is rude and unprofessional and not ask you to calm down and say I don't think it serves any useful purpose bs when you are the paying customer wanting all your options on the table laid out. Skip that lawyer I would say.

Do whatever you want to do man.

Froglotion

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#2494087 29-May-2020 08:46

How do you not already have your own trusted lawyer? Especially after already have lawyer issues.

As to the question regarding commissions, as long as sells, you get the same net amount, buyer is paying any commissions. Excluding time, I don't see how you are going to be financially but by this situation. I could be missing something, but the costs of them not settling will easily cover your expenses over that same time.

The fact you gave up a higher price is frustrating for sure! But that isn't what you seem most interested in. Good luck getting it sorted.

Nate001

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#2494110 29-May-2020 09:20

Seriously unprofessional if that is how the conversation went. I wouldn't be paying my lawyer to berate me for asking legitimate "what if" questions. Sounds like a conflict of interest somewhere in there.

Friend had an average lawyer for his recent house purchase, they recommended 1 week for unconditional to get builders report and confirm finance, they actually missed deadline but the vendor extended by 2 weeks and everything went through happily. His first time purchasing and he was clueless about the process.

kingdragonfly

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#2494118 29-May-2020 09:30

This exchange is from emails.

She had spelling mistakes, and her email was just one long paragraph, so I added some white space to make it readable.

Obviously I touched a nerve either questioning any motives from Harcourts and/or asking for legal advice from a lawyer I was paying.

As to why I made the same mistake twice, asking the real estate agent for a recommendation on a lawyer:

Why does anyone do something stupid repeatedly? In my case, it was convenience during a stressful time. More fool I.

Bung

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#2494197 29-May-2020 10:04

kingdragonfly:
I'm not sure how you find a good property lawyer, but I'm finding my lawyer suggested by Harcourts is a little too cozy.

I don't see that any lawyer could do more on your behalf. It's not as if they are also acting for the defaulting buyer.

In these times anything could have happened. The buyer may have arranged access to family money that has had to be redirected or worst case is now part of an estate.

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#2494242 29-May-2020 10:56

networkn:

Whilst legally not required, I would have accepted the extension.

Me too.

And particularly if you think house prices have topped out, why not wait a couple of days for a win/win for both parties?

And I'm appalled at the callousness of many of the comments calling the purchaser an idiot or similar. You don't know any of the details of the purchasers situation and $60k is a lot of money for someone without much to lose.

concordnz

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#2494248 29-May-2020 11:02

kingdragonfly:

Back to this Johnsonville sale, here's an email from just my current lawyer.

Me: Should Harcourt's be pulling their commission before the sale has settled?

I thought the sale could still fall through, if the buyer is unable to settle (pay the remaining balance).

Just a lawyer: Yes, legally that is correct.

The sale is unconditional so the deposit is collected by them at that point and then their commission is deducted prior to vendor being paid the balance.

Technically, even though settlement hasn’t occurred, the property is ‘sold’.

If the purchaser failed to settle, the deposit is forfeited, so Harcourts get to keep their commission and you get to keep the balance.

Me: So if it falls through, they get a second commission on the second sale?

Just a lawyer:You need to calm down.

Harcourts have, as always behaved professionally and perfectly within the law.

They have not ‘attempted’ anything underhand at all.

All agents deduct their commission from the deposit I am not certain why you are so focussed on your sale not settling

I really don’t think I need to be having this conversation with you but if you are concerned about what might happen in the unlikely event of your purchaser failing to settle then my suggestion is that you contact the Manager at Harcourts Johnsonville.

You asked a ‘what if’ question and I answered it. I don’t think it serves any useful purpose to explore all possibilities unless strictly necessary i.e. your purchaser fails to settle.

Notice quotes around 'sold.' Call me crazy but I don't think there's a legal concept of 'sold' in quotes versus sold without quotes. I guess I can tell my creditors I'll pay my bills in 'money'.

Because why ask my property lawyer about the property law? I should always assume the best outcome, and not ask about the worst case.

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.

concordnz

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#2494252 29-May-2020 11:19

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)

1101

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#2494259 29-May-2020 11:29

concordnz:

and it was right for the Lawyer to suggest he pull his head in.

I'd tend to agree :-)

"Just a lawyer:You need to calm down. "
Lawyer could have played along , racking up legal fees casing up on all this when the outcome was cut & dry .
I'd bet all this would have been covered in the contract he signed .

If agent sells a house for the 2nd time, then of course the agent will charge for that .
Seller can use another agent if he thinks he's being hard done by .

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#2494272 29-May-2020 11:35

I've had a lawyer stuff up my S&P big time. The fresh lawyer was inexperienced and gave wrong advice. When I asked for the senior lawyer he gave even worse advice. I told them you are getting me in the position of being sued. The senior's reply was - yes sure but you shouldn't worry about it. I nearly died. A simple clean residential house S&P and got bummed around for 2 months. My only regret is not realizing the need to change lawyers quicker. This was Oct last year.

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1101

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#2494275 29-May-2020 11:37

If he sells the house later , will he give back the 1st 60K deposit , or just keep it .
Thats whats he SEEMS to expect from the Agent.

BlinkyBill

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#2494286 29-May-2020 11:51

The OP is entitled to rely on the sale agreement, and is entitled to retain the deposit. He is in a strong position actually - the Wellington market is rising in the sub-$750k segment, and he had higher offers in addition to the failed one.

If it was me, I would negotiate with Harcourts for a reduced commission rate on the subsequent sale, change solicitors (maybe consider using a specialist conveyancer), and use the retained deposit funds to compensate for the stress and strain.

If Harcourts won't budge, change Real Estate agents (consider Tall Poppy).

The sales agent is entitled to keep the commission, since the deal was done.

Froglotion

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#2494287 29-May-2020 11:52

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.

Huh? OP will only get purchase price minus realestate fees, no matter what happens. Are you suggesting that in the same position you'd just roll over and take it? They could have more money in their pocket had they gone with the conditional offer. Realestate fees are due no no matter what happens. 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. All they have done is ask to clarify the situation. They obviously want the deal to go through fast, as per the signed agreement. They are perfectly within their rights to do so. It is not their problem that the other party lied to secure the property.

It has nothing to do with being pre-approved IMO. If someone is pre-approved, they should not be making an unconditional offer. You make an unconditional offer if you have cash. So it was fair to assume the OP thought that's what the buyer had. No one is trying to make anyone lose 61k here. OP is literally just trying to sell their house. Buyer lied, seller is now in limbo. Yet all the hate seems to be towards the seller. Hmm.

dafman

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#2494304 29-May-2020 12:24

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 ...)

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