Jim Valentine: When real estate transactions don’t go as they should
Most residential real estate transactions flow fairly smoothly. Once contracted, buyer and seller want the same thing, the safe close of escrow. Sure, there may be some unforeseen bumps along the way such as poor credit, or extensive dry rot, but most things get worked through with a cooperative spirit by both sides. Once in awhile, however, someone comes along that doesn’t play nice. What do you do?
Buyers and sellers don’t always meet one another before they come to terms making it difficult to get a “read” on the person before you contract. You might be able to get a sense of their attitude from the negotiations, or how the offer was prepared. Are they unreasonable in their expectations, or being super sensitive about the integrity of the other party? There are a lot of checks and balances in offers and the law to protect both sides. If a person needs special clauses with exorbitant demands due to his fear the other party may not perform in accordance with the terms of the contact, beware.
Most transactions are safe for both parties when agents use the forms typically seen in Northern Nevada. If you have a unique situation then you may need to add clauses for clarification even if they are redundant to existing clauses. It is always better to be redundant so you are sure everyone will understand the agreement, than to assume that they will read and interpret the contract they way you intended it to be understood. Always be sure that the contract says what your are intending it to mean before you sign it.
If someone agrees to terms and conditions and then doesn’t comply with them you must know your options. It can be a financial, physical, or other matter, but if it was important enough to be included in the negotiations then it is important enough to be enforced. If someone is unwilling to comply you may have the option to rescind the transaction, quit and find another home, or buyer, depending on which side you are on. If you don’t want to quit then there may be pressure points to help you encourage performance. For most things in the transaction, it takes agreement by both parties to keep things moving.
If the escrow has closed and you are stuck with a post-closing condition that one of the parties isn’t complying with then you lose the option of holding up the closing or rescinding, but there may be other forceful approaches to a resolution. If there are funds held in escrow and the other party is being unreasonable and not releasing them you can initiate an interpleader action and have the court force the action. It isn’t cheap, but your contract will likely have a provision specifying that the prevailing party gets their attorneys fees paid. If a person is just being belligerent this may compel him to action, or ultimately, have him mandated to act by the court and to pay your legal fees. Not fun, but good to know if someone just isn’t playing nice.
Our Advice: A contract is only as good as the people that sign it. You can close on a handshake, and not close on a multi-page sophisticated agreement, if any of the parties involved aren’t people of integrity. Most people have compassion for the other side and work for the benefit of all parties. Once in awhile there are those, whether out of ignorance, malice, or simple greed, that will take advantage of the other side in a transaction. If you find yourself in such a situation talk with your agent to determine if you are in a compromised position, or not, and outline your options. Negotiation to a resolution always best, but if the other side doesn’t work with you be sure you have a good understanding of your footing, and theirs. Quicksand can be difficult to take a stand in and its best if you know up front so you know how to proceed. The converse is true as well.
Business does not mean decapitating your opponent to be successful. Negotiate a good transaction and work together to the close of escrow so everyone comes out whole. It is a nice way to live.
When it comes to choosing professionals to assist you with your real estate needs … Experience is Priceless! Jim Valentine, CDPE, SFR, RE/MAX Realty Affiliates, 775-781-3704, firstname.lastname@example.org, http://www.carsonvalleyland.com.