Things don’t always go to plan
In this case study, we will look at what can happen when a client cannot close on a property with an accepted offer.
Susie went to a broker and explained her situation:
- She had put in an offer on a property and was approved, with no conditions.
- She was using a down payment from the sale of her property which had yet to receive offers.
Get the right advice
The broker conducted a review of her situation and explained to Susie that her property would need to sell for a certain amount. If sold for this amount financing could be obtained. Nevertheless, time went by and Susie still had not been able to get a sizable offer on her property – allowing her to purchase the new one. Consequently, she would be short of funds for the downpayment amount needed. Susie decided to pull out two weeks prior to closing. Pulling out meant that she lost her $10,000 deposit. Subsequently, Suzie took the advice to have a firm offer on her current property prior to putting in an offer of her own. This way, she knew how much she had available for a down payment, and received proper advice from her broker.
Always consult your Broker/Agent when purchasing
Approximately a year later, Susie received a lawsuit from the sellers of the property on which she did not close. Furthermore, the sellers stated that they did not receive the deposit from the realtor and sold their property for much less and Susie would have to cover the difference. Susie now had a big mess on her hands. Clearly, this mess could have been avoided had she consulted her broker prior to bidding on the property. She contacted the broker to discuss what happened. The broker stated that there was little he could do and that he was not liable as she had the firm offer in place prior to consultation. In addition, there was the matter of the deposit being held back and not provided to the sellers. Susie ended up countersuing the realtor for damages.
What if?
What info Susie would have received if she had consulted with a broker/agent prior to bidding on properties:
- a detailed summary of her closing costs and how much she could afford
- advice on what to do with the property she was selling and conditions for approval of the purchase. Additionally, which conditions and when to remove them are discussed.
Always remember
The broker/agent is not liable if a client had a firm offer of purchase prior to consultation or if a client decides to remove conditions on his/her own.
