DEAR MONTY: I am selling my home through an agent, and I verbally agreed to a price from a guy who lowballed by over half the asking price. The guy is nitpicking everything and taking forever, so I have signed no papers. Now I have another offer through a personal friend. I want to know if I can accept this other offer and still pay the agent’s fee because she deserves her fee. I want to buy a different home.
MONTY’S ANSWER: When you state, “I verbally agreed” and “I have signed no papers, ” you noted the verbal is taking forever. I will assume the lowball buyer is going through the due diligence without a signed purchase contract. Offers in real estate law must be in writing to be enforceable. Real estate is not a good place for verbal transactions. Oral agreements are fraught with potential misunderstandings, hurt feelings and mistreatment.
It is very unusual for a buyer to take the time, money and effort to complete due diligence when buying property without the benefit of a purchase agreement. There are four key points to include when creating a binding contract. They are the price, identification of the property, the names of the parties and the time limit for performance. Real estate contracts often have additional contingencies.
The nitpicker’s problem is spending money on different inspections, application fees, and an appraisal if he is unsure about his agreed price. There may be other possible costs as well. If you sell to someone else, he is out, with no chance to recover his costs. Your problem is that you cannot move forward with your plans without a binding agreement.
The Personal Friend
If there is no contract between you and the lowball buyer, you are free to sell to your friend. Supposing there are contingencies in your friend’s agreement, be careful not to commit to buying a different home. A contingency subject to the closing of your home sale would allow you to proceed with your purchase.
The Listing Contract Is With The Broker
Your obligation is to the broker who employs your agent. The broker will pay the agent with whom you are working. The agent has a separate agreement with the broker about their compensation. You don’t have to worry about whether you can pay them.
Keep Your Agent In The Loop
When you ask “if (you) can accept this other offer and still pay the agent fee,” it sounds like your friend wants to buy the house directly from you. Further, your question about paying your agent suggests you have not included your agent in the conversation. If you have not already discussed your friend with your agent, I highly recommend you take advantage of their service. You are paying for it either way.
Your agent should be able to answer the questions you have posed. Are you seeking a second opinion because you are uncomfortable with the agent? If you are uncomfortable, find an excellent real estate attorney to review the purchase agreement your agent drafts before you agree to sign it. Then you will have a contract.
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