All Forum Posts by: Ben I.

Didn't read all of this.

Next time have a contract where FOR ANY reason during inspection period, due diligence, etc. you can cancel and get back your full earnest money. Have in the contract that the contract does not require the sellers consent. This way the neutral third party title company or attorney holding the EM ( do not let sellers attorney hold it)  can reasonably determine based on the contract who is owned earnest money.

I have seen sellers before almost blackmail the buyers saying unless you take 3k out of 15k earnest money deposit then we will fight this in court. If the contract says both parties have to agree on release of EM or it gets interpleaded into court then usually not good. The sellers know they likely lose in court but until then it's a way of keeping the whole earnest money tied up. The seller in this cases is trying to get their attorney fees paid instead of coming out of pocket for the cancelled contract.

When anyone says a full gut has been performed ask for pictures of the WHOLE process. This tends to cut down on shoddy work and hiding stuff behind walls.

No legal advice given.  

Admittedly I did not read the entire past three pages of threads and responses. However from your question I severely doubt you have anything to worry about. What are they going to do, ask a court to force you to buy the house? Very silly. Plus you have the home inspection with issues. They cannot just come back and force you to hire an expert (structural person) to tell them what they need to do to fix their own property. That would be madness. They have to hire the experts themselves. That is the whole point of a cure provision, and certainly the cure provisions in the standard WI real estate contracts. If I were you I would contact a lawyer, of course, to get high quality information if needed. But I would probably just call them and tell them they need to leave you alone and they should not contact you again. If they have a lawyer however, then presumably their lawyer sees something in it willing to take his/her time. So I would be more careful. Even so, their lawyer may be unaware of the facts or something. I personally would probably ignore them after informing them they have nothing. The caveat is I have not seen all the documents, etc. Any lawyer you contact you need to also give them the documents. Do not just ask them hypotheticals. I hope it works out!

Done.  There's no legally binding contract.  Consideration (money) is a necessary element of a binding contract.  That's why nobody signed a CAMR (cancellation and mutual release) because there was nothing to cancel.  The broker never had agency to legally represent the seller and couldn't legally deposit the funds into their trust account.  Wow, how do these people even operate?  You could report them to the WI DSPS (Dept of Safety and Professional Services), but if I were you, I'd just put it in my rear view mirror.  This entire chain of events is NOT normal practice and should end up as a one time occurence in your investing career.  Sleep well tonight.  You'll be fine.  Again, not an attorney, but been in the biz a long time.

Wait.  Did they give you YOUR original check back or did they cash it and give you a check from the Broker's Trust Account?  If you have your original check, then there's all kinds of wrong with that.  Then for sure you have no worries whatsoever....although I don't think you have a worry either way.

Originally posted by @Ben I.:

Originally posted by @Joe Splitrock:

@Ben I. tell your agent they cannot share your phone number or any of your contact information with the attorney. If they want to find you, make them work for it. You may be able to avoid this simply by not talking to them.

I would also encourage you to read your contract carefully. I found this standard contract on the WI website, but it doesn't match what Brie shared, so I don't know if this is the right contract. Assuming this is the right contract, there are two sections to look carefully at:

217 Right to Cure

This section gives you the option in your offer of choosing if the seller has rights to cure and you can fill in the number of days. If left blank it defaults to 10 days. This is probably the critical point as whether they failed to perform on the contract.

490 Default

This section explains what happens if the contract goes into default. The seller or buyer have rights to the earnest money, depending on who breaches. The fact they returned the money to you already helps your case, because they need to prove it was returned in error. The sellers agent seems to acknowledge your rights to the money by returning it.

My comments are based on this contract from the WI state website. Read your specific contract:
https://dsps.wi.gov/Documents/BoardCouncils/REB/Forms/WB11202001.pdf

I would avoid contact until such time you are served court papers. At that time, hire an attorney. Do not represent yourself. My guess is it will go away and I would not spend money defending myself until necessary. 

 You got to it before I did. We wrote in three days in that section. 

What do you think? Is this clear now or is there an angle they can chip at? 

I am not a lawyer, so this is not legal advice.  But it looks like you are good.  My guess is the seller is suing you because he did not realize that this change occurred with the new contracts and the agent wrote in 3 days.   I would have your agent call the lawyer that wants to contact you and politely tell them to review line 219 of the contract and provide the lawyer with a copy of the contract

@Ben I. Here in CA you have the inspection period for all inspections and if anything shows up you don't like, you can cancel, OR ask for repairs. If they refuse to do repairs, then you can cancel.

It seems as though you were within your bounds, and they couldn't perform. However; we don't have a copy of your contract and can only guess

Your broker needs to deal with this. They were the ones that should have made all requests, filled out contingency releases if necessary, etc. Email them.

I don't know your laws, or contracts. There's usually a clause for arbitration, and if so, hopefully you can do that. But talk to your broker first, then attorney if he can't handle it.

If both parties were represented by Brokerages, did you escalate the matter to the Brokers first? Both companies should have in-house representation to review the contracts and see if the matter was terminated lawfully according to the written contracts. In Texas, you would head to mediation first, not lawsuits. Curious how Wisconsin contracts work.

@Ben I. Dam Ben I'm sorry it sounds very unfair to me I had a similar situation I've had to fly out the Florida it cost me at $1000 the property look nothing like it did in the pictures what saved me mostly I was backing out anyway because it needed too much work and the appraisal sell short thank God it cost me over 1000 But in the long run saved me hundreds and a lot of headache and he took his sweet time returning the $3000 earnest deposit back but he did so I understand you're pain I'm curious to is he fell short of the 3 days or whatever's written in the contract I don't know why he got an attorney I don't know what he thinks unless he has a relative that's doing it for free

In TN, it's pretty simple: do you have an EMD Disbursement/Release form (whatever the local name for it is) and if so, who all is it signed by? Should be both Agents, both Buyer and Seller, and both Brokers. Look through your docs and see if you signed one; if you don't have a copy then take better records in the future, then reach out to the Agent and ask for one.

With this signed and acknowledged by all parties then it's literally a mutual dissolution of the contract and all parties move on, so there's not much they can do.

Wow!  So much great feedback to you!  I agree 100% with everything Mike M. typed to you.  I would also add that you have nothing to worry about.  I've been in this situation a couple of times on both sides of the table both personally and with clients.  The super fact that nobody is mentioning here is this....if they sue you, the property is tied up!  The cannot sell it until the lawsuit is over and the courts have decided if you are held to specific performance or let off the hook.  This will cost them WAY more than any sane person should be willing to spend to get revenge in court.  

Anyways, don't spend another minute thinking about anything unless the lawsuit is filed and you are served with a formal complaint.  And never ever speak to their attorney about anything....do not let your number be given to the seller or their people.

I also have a thought on the whole agency thing.  If they truly did not have an agency agreement with the listing broker, AND you didn't have a buyer's agency agreement with your agent's broker, then your agent also had no agency with you to even legally write the offer.  In the abscense of a buyer agency agreement, the selling broker relies on the cooperative broker agreement based off of the listing broker's agency agreement with the seller (and legally works for the seller...not you).  So then this whole thing is a mess and likely not a legal contract no matter what.  The brokers can be sued for acting as an attorney since WI only allows them to fill out the legal contracts based on their agency agreements...it is otherwise acting as an attorney without a license.  The real estate license is not a legal license...it's a license to simply fill in the blanks of WI state approved documents once there is a legal agency agreement between the parties.  Also, the broker cannot legally take the earnest money without an agreement and cannot legally disburse it without a signed Cancellation and Mutual Release from the seller with instructions of amount and where it is being sent.  Sounds like some brokers are in hot water to me!

I'm not an attorney, and these are just things I've been a party to.  My 2 cents is to not sweat it unless it becomes a real thing.

Breathe!
Jacci