listing agent wants to void purchase agreement because I changed mortgage companies?

**blazini** · 04-06-2008, 06:24 AM

I am trying to purchase a home, which went under contract mid march to close end of April. I had a pre-approval from my broker (that wasn't worth the paper it was written on). Broker said it would take 10 days to get the commitment, after 2 weeks he couldn't get one. I believe my debt to income ratio was the biggest issue, as I don't believe he was able to convince his bank of my actual income vs. my simple base salary.

Knowing time was running short I immediately (like an hour later) contacted another mortgage company. This broker believes there will not be an issue and is working to secure a commitment before the deadline (apr 10). The contract is contingent upon me securing financing.

Like 2 days after I learned the original broker could not get a commitment, the listing agent sent my agent a release letter, stating I could basically just walk away and get my deposit back. I believe she learned of the issue because my realtor called her and explained it to her before he could get ahold of me. I think he may have thought I would've wanted to walk away from the deal, which I had the right. She did mention to him they had other offers.

Once I told my realtor I was working on other financing and he spoke to the new broker, he sent her a letter stating I had no intention of releasing the agreement. She sent a letter stating I breached the contract by switching lenders and I would forfeit the deposit if I did not sign the release. My agent the got the attorney who will be handling closing involved, he sent a letter stating that I am not in breach just for switching mortgage companies and as long as I maintain the same type of financing and get a commitment by 4/10 I'm good. According to him, anything they do is grounds for a law suit and a lis pendence will be placed on the property. So that's where I am now, waiting to see what happens after the weekend.

Obviously this issue is fueled by greed on the listing agents part, I'm sure she acquired a better offer somehow. I'm not terribly worried about it, since my agent's a pretty smart guy and seems to have a handle on things. Am I correct in thinking that as of now they have to honor the contract as is? I don't believe the contract even mentions the mortgage companies name (could be wrong though). Am I also correct thinking that if financing does fall through again, I will recieve my deposit refund since the contract is contingent upon that? This real estate stuff is driving me crazy, 2 years ago I had a deal fall through at closing because the seller was upside down on his property.

**championprops** · 04-06-2008, 08:24 AM

It looks like the listing agent is a real piece of work here. I would ask the closing attorney to give me something in writing verifying what they said for future reference if it goes to litigation.

Are the listing and selling broker's aware of the situation? I would convey to the listing broker that if they try to sell the house before the contract expires that they will be hearing from your attorney.

**championprops** · 04-06-2008, 08:26 AM

There is usually a standard clause in all contracts that the deposit will be refunded if financing can't be obtained. Hopefully you are using a standard contract that your local board of realtors use..........

**blazini** · 04-06-2008, 04:59 PM

Originally Posted by championprops

It looks like the listing agent is a real piece of work here. I would ask the closing attorney to give me something in writing verifying what they said for future reference if it goes to litigation.

Are the listing and selling broker's aware of the situation? I would convey to the listing broker that if they try to sell the house before the contract expires that they will be hearing from your attorney.

Just to clarify, the listing agent sent the letters to my agent, my agent forwarded it to the attorney then the attorney himself sent her a reply. Everyone is pretty much aware what's going on. I don't think the listing agent's bold enough to try and sell before the contract expires. What she wants is for me to release the contract, so they can. According to her I am in breach for switching mortgage companies and if I don't release I forfeit my deposit. Fortunately, she's the only one who thinks she's right.

**championprops** · 04-06-2008, 06:41 PM

I don't think you have anything to worrry about. Without a signed release they are sol until the contract expires. Buyer's change lenders all of the time, I have never heard of that being a breach of contract.

You might want to consider calling the state Real Estate commission and informing them of you dealings with this agent. As a broker, I wouldn't want to be responsible for anything this person does..........

**carlam** · 04-07-2008, 04:17 AM

Mortgage programs are changing all the time in this market, if it were true that you do not have the right to change mortgage companies; there would be a lot of buyers in the same boat. The listing agent is probably trying to get you to sign the release to move on to bigger and better fish. Stay the course!

**Greg** · 04-07-2008, 09:11 AM

It's agents like this that give us all a bad name. It is not up to the listing agent to decide what to do with the earnest money. There are laws that have to be followed and it sounds like your lawyer is on the ball. Relax and don't worry about that agent.

**blazini** · 04-09-2008, 09:40 PM

Originally Posted by championprops

You might want to consider calling the state Real Estate commission and informing them of you dealings with this agent. As a broker, I wouldn't want to be responsible for anything this person does..........

I plan to, my agent actually mentioned it too.

For the realtors out there, do realtors have a boss or someone they answer to? I figure most of them are like insurance agents that kinda have their own franchise or something.

Reason I ask is cuz this lady is giving everybody a hard time. My new mortgage guy called her to tell her I'm good for the loan, and she hung up on him! He actually called her ridiculous, and this is the first he's spoken to her. That's aside from the nasty letters she's sent my agent.

I don't think the sellers are aware of this, they moved back to Florida when they put the house up. This is the kind of thing you would expect from a crazy seller, but not a professional real estate agent.

**championprops** · 04-10-2008, 05:31 AM

That agent's particular Broker is responsbile for everything she does. If I was betting I would say this isn't the first time she has exhibited this type of behavior. She is probably a big producer and the Broker doesn't care because she is making the company money.

Here are 3 options for you.

1. Contact her broker with your complaints and concerns, if they are affiliated with a big company I would also contact their main office.

2. Contact the local Board of Realtors and file a complaint. They don't have a lot of power but they will set up a hearing and create a hassle for this agent. Might require her to do continuing education or a fine.

3. Contact your state's Real Estate Commission. These guys have the ability to fine and possibly revoke her license. This is an agent's biggest fear.

Good Luck and let us know how things go........

**blazini** · 04-10-2008, 04:32 PM

Thanks for the advice. I'll probably hold off on the complaints till after the closing, no tellin what this lady will do. But I definitely will file some form of complaint.

I'd been wondering why she was so eager to stop the deal, a couple grand better offer would only mean a couple hundred extra bucks toward the listing agent right? Well I spoke to my realtor today, he mentioned that the buyer was actually her buyer. She's a dual licensed agent so she would have been pulling double commission on that deal. Well it makes a lot more sense now. Kind of explains how she was able to find another buyer in the first place when she pulled the house off the MLS when they accepted my offer.