Is Ethics and Integritty a lost art???

[Lindagerr]

In this me first , how can I get the most money attitude in today's America causes us to lose sight of the importance of: giving your word, shaking a hand in agreement and now signing a contract. People are using every legal loop hole they can find to get out of a agreement if: a Better one: comes along. In my opinion and that of my realtors once we signed a contract, gave a $3000, ernest chek, sent the contract (also signed by thr sellers.) and sent to that attorney At that time we have bought the house. Barring any soft contingrcies like somethink is wrong with the house or the lawyer wants a change in wording.

We went into contract on a house in NY State last Thursday, we loved the house and wanted it. We offered the full appraisal price with no consessions or givebacks. We spoke to our lawyer and inspector on Frifay And all was signed and set up for this week.

1st thing Monday morning My realtor (SB) lets us know that the sellers agent (KN) had called and they had accepted another offer over the weekend.

By this time we thought it was a done deal. There was no sign of water damage, electric looked fine, We knew it way in good shapr befrore we eveb signed the contract. We got a lawyer ans she was doing the review og the contract. We have an inspection set up for tomorrow.

Now the owners (C&KH) say the don't want to talk to our realtor. They will allow (KN) discuss somethings with (SB) but they are still not committing to either deal.


My lawyer, Realtor and the inspector are all in disbelief, The lawyer says it is "Legal" because the lawyers hadn't approved the contract yet ( they didn't even have a full business day yet). But this is considered Unethical behavior on both the part of the sellers (C&KH) and the agent for them (KN).

I am very upset to have had this happen, it has taken the good feelings off of home buying. It also upsetts me the 2 young NY area professionalls can act in this was and stillexpect to be trusted to be Ethical in any other contract situation.

Am I being unrelistic to expect that a signed contract should be treated as if it is legal and binding. A side from a feeling of loss for the house I loved, I feel a sence of embarrasment because we showed everyone we know and shared our excitment.


So the question to all you business, law, ethics and honest people. Is it ILLIEGAL or just UNETHICAL?

[skyfall123]

The rules have changed. I put in a full price offer on a condo back in January. They came back saying that they had multiple offers and were now taking highest bid offers. I stunned my real estate agent by informing him that I was exercising MY legal right to void the signed contract since they got greedy and made a counter offer hoping to get more money out of me (any counter offer supersedes any original offer, signed or not). BTW the condo is still for sale.

I understand all of the emotions you are feeling....but this is a buyers market and there will be other and possibly better properties out there. Keep looking, the better educated you are the better the deal you'll get.

[alleycat]

In this me first , how can I get the most money attitude in today's America causes us to lose sight of the importance of: giving your word, shaking a hand in agreement and now signing a contract. People are using every legal loop hole they can find to get out of a agreement if: a Better one: comes along. In my opinion and that of my realtors once we signed a contract, gave a $3000, ernest chek, sent the contract (also signed by thr sellers.) and sent to that attorney At that time we have bought the house. Barring any soft contingrcies like somethink is wrong with the house or the lawyer wants a change in wording.

We went into contract on a house in NY State last Thursday, we loved the house and wanted it. We offered the full appraisal price with no consessions or givebacks. We spoke to our lawyer and inspector on Frifay And all was signed and set up for this week.

1st thing Monday morning My realtor (SB) lets us know that the sellers agent (KN) had called and they had accepted another offer over the weekend.

By this time we thought it was a done deal. There was no sign of water damage, electric looked fine, We knew it way in good shapr befrore we eveb signed the contract. We got a lawyer ans she was doing the review og the contract. We have an inspection set up for tomorrow.

Now the owners (C&KH) say the don't want to talk to our realtor. They will allow (KN) discuss somethings with (SB) but they are still not committing to either deal.


My lawyer, Realtor and the inspector are all in disbelief, The lawyer says it is "Legal" because the lawyers hadn't approved the contract yet ( they didn't even have a full business day yet). But this is considered Unethical behavior on both the part of the sellers (C&KH) and the agent for them (KN).

I am very upset to have had this happen, it has taken the good feelings off of home buying. It also upsetts me the 2 young NY area professionalls can act in this was and stillexpect to be trusted to be Ethical in any other contract situation.

Am I being unrelistic to expect that a signed contract should be treated as if it is legal and binding. A side from a feeling of loss for the house I loved, I feel a sence of embarrasment because we showed everyone we know and shared our excitment.


So the question to all you business, law, ethics and honest people. Is it ILLIEGAL or just UNETHICAL?

Well this is a disappointment for you. Yes it is legal to not accept a offer on your home or any real estate that you are selling. Is it unethical what the sellers did, the answer would be no it is not. Who knows at what time the other offer came in, it really could have been in before your offer. The sellers do not want to be harrassed over their decision they made that is why they are refusing to speak to anyone. Also please remember they have a realtor to be their messenger. People have realtors for a reason. They take the heat for decisions and are the sellers "agent". Your real estate contract was not binding until the lawyer signed off on it. Which never happened.

Also there is no need to be embarrassed by a real estate deal gone bad. It is nothing you did wrong it is just part of the real estate game. Now my belief is that this was not your house. What is the old saying things happen for a reason. I really do feel that way. As disappointed as we can get when things don't go our way, they happen for a reason.

Now dust yourself off, get going, and get your NJ house cleaned, painted, and ready to show. This just bought you more time to unload your NJ house.
When you are given lemons make lemonade. You will find a better house.

[LaterBloomer]

Linda,

If you made a written offer, and IF the homeowners signed it, I would recommend that you talk to a real estate attorney. My understanding - and it may be different in NY - is that once an offer is made and signed by both parties then you have an enforceable contract.

If it was not signed by the homeowners, and you "only" got their word that they'd accept it, then you may be out of luck.

Take heart, a nicer home at a better price is JUST around the corner for you.

Later

[MomOfMany]

Wait.

This is the NORM scenario everywhere afaik.

Buyer makes written offer and submits it to seller

Seller has option to
A. Accept offer
B. Counter offer
C. Decline

At which point buyer either
A. Has a legal agreement that usually has a set back out date for either party should they change their mind. (usually 3 - 7 day and contingencies, such as presuming it passes inspection or loan approval..)

B. Accept the counter offer or make a counter to that counter offer or Decline

C. Accept their decline or make another offer

This is a normal part of negotiating terms, be it a house or any other financial bargaining situation. It is not unethical, illegal, or greedy.

I'm sorry you are disappointed. I get that. It took us over 3 years to find our current home and 2 house deals fell through during that time. Thankfully, I'm very glad because the house we ended up with is way better for us than those were anyways.

Hang in there. Keep looking and keep your eye on your financial and home goals. It will happen.

[mrs.b]

What constitutes legal varies state to state, because different states have different laws. Real estate agents that wish to practice across state lines must get licensed in each state because of this, just like lawyers must be approved in each state they practice. In some states, when both parties sign the offer letter, it becomes a binding contract. In other states (and it sounds like the case in NY), it only becomes a binding contract after a lawyer reviews and confirms it.

Ethical or unethical falls in another category of murky water. I definitely see your annoyance and frustration from a buyers' perspective. If viewed from a seller's perspective, though, their goal is to get the most money for their sale as possible, and in today's buyers' market, that can be tough. If NY has laws that do not make it a binding contract until the lawyer signs, and during that wait a higher offer came in, they were probably in a serious dilemma and, unfortunately for you and your family, decided to go with the other. I may not win friends or influence people with this statement, but they treated it like a business transaction, which it is. It is an emotionally-invested business contract for buyers, but it is a business transaction either way.

We went through a few rounds of similar issues when buying our house. Our home's seller accepted our offer, and literally twenty minutes after I received the signed letter back, my realtor called to say to freeze because the seller had received a higher offer minutes after they faxed and were considering it. Luckily, that other offer was for more money but included a lot of clauses that made the seller pass in favor of our simpler (albeit slightly lower) offer that was already signed. They could have backed out, and I'd have been annoyed, but we had it happen twice before and were prepared. At this point, I'm glad the other two did what they did; the house we did finally get is much better for our family. It worked out in the end. It will for you, too.

[ryoder]

Put yourself in their shoes. You are selling your house that has lost 100 thousand dollars in value over the past few years. Someone gives you what you consider a low ball offer and begrudgingly you take it because you feel you have to. Then another offer comes in considerably higher. You call your realtor and he says legally you are within your rights to sell it to the higher bidder. The difference in cost could mean sending your kids to college or not. What would you do in this situation?

[Storyteller]

It doesn't sound like there was a contract, just an Offer to Purchase. Therefore the sellers can sell to whom they please. Whenever two people want one item, someone is bound to lose. (Just ask Solomon)
Keep looking - a better house awaits...

[bkahuna]

My family has roots in the home building industry. Father is a architectural draftsman and my grandfather was a home building inspector for a city in the southwest for 20+ years. Both of them also did general contracting together and built several houses.

That being said I also lived in NJ where I bought my first house and had to go through the real estate lawyer mumbo jumbo which was a first for anyone in my family. Here in TX, everything runs through the title company who has their own lawyers and things are a bit simpler.

First things first, you will find another house. There are always others and there is no such thing as a perfect house, PERIOD. Even if you build from the ground up its not going to be perfect.

Second, from a legal aspect, I'm sorry to tell you but you have no recourse. Even a verbal agreement, while it is considered a legit contract, is probably not enforceable from a legal perspective because it involves real estate. I had a similar situation when I first moved here and made an offer on a home, only to be turned down by the seller because they had multiple offers. To top it off my realtor was also the listing agent, so I had to use a different realtor to make the offer. You'd think that being my agent would give us a leg up in the process, you'd be wrong. Remember the incentive is for BOTH realtors to get the most money because they are paid on commission. Do you think your realtor as your sellers agent works in your best interest? NO WAY. They work to make the highest agreement possible that will proceed with the fewest complications because thats how they get paid. If you pick up a copy of Freakonomics it explains this in detail about the information advantage of realtors.

I know I'm going to get backlash on this, but realtors really are a drain on the economics of the home building business. They provide no real value to the process, they just open up the MLS and take you to see the properties, then they try to convince you to buy. For the commission they charge (6%) the service they provide is really like match.com, where they put you into a website and the other realtors search it. On the selling end its even worse because the seller's agent really doesnt do anything but put the sign up, and if your house doesn't sell they try to convince you to paint the house, fix the landscaping etc etc and when that doesnt work they tell you to drop the price. The incentive for the seller's agent is to clear the listing and make the sale, not to have your house sit on the MLS 6 months or more, so if they can do that by getting you to lower the price they get paid faster.

The only way to avoid realtors is to act as your own agent (which may still result in you paying 3% to the buyer) or go through a discount MLS service (they have one here thats $500 flat fee). You can also put up a for sale by owner sign and take your chances, but investing the money in doing advertising int he newspaper is futile.

Again, dont take it personally, you'll find another one. Move on, keep your sanity.

[ryoder]

I agree about the realtor value issue. Now that FSBOs can show up on the MLS there is not so much value using a listing agent.
They are sort of like recruiters. They just want to make a deal and get a commission. They only care a little bit about placing the right person in the right job.