John's Florida Real Estate Blog

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Where Are The Sellers and Buyers Whose Word Is Their Bond?

After reading some of the Q & A here on Active Rain I sometimes feel like I should take up a lantern like Diogenes of ancient Greece and go looking for an honest man or woman. Over and over again I see questions from buyers and sellers who are looking for a way out of a contractual obligation, just because they have changed their minds. Now, I understand that sometimes they may not be able to perform their part of the contract due to unavoidable problems, loss of a job, a death or illness, etc. However, time and again it is because they have just changed their minds and decided not keep their part of the bargain.

In my own career, I have seen sellers who decided two days before closing that they would not sell their home. The poor buyers had invested in financing fees, a survey, an appraisal, two inspections, and a lot of time. They had also sold their home and had their belongs on a truck on the way to Zephyrhills. It boggles my mind how a seller can do this with no feelings of guilt. Sadly, they get away with it since many brokers are reluctant to sue for the commission that is rightly due them.

In the Q & A I see a lot of buyers who want to know how many days they have to cancel the contract they just signed. I feel like shouting, "If you were that unsure, why in heck did you sign the agreement in the first place?" They have greatly inconvenienced the sellers and the agents involved in the transaction. But that does not seem to matter to these self-centered persons. To our members credit, they often bring up the inconvenience and problems that cancelling will cause the innocent other party in the transaction. It appears that today people take their word and the word of others very lightly. Are you seeing that in your areas?

Most of my inspectors and handymen know that if the buyer stiffs them that I will take care of them. That is a trust I have developed with them. As REALTORs we need to be sure that our word is indeed our bond. If we say we will do something we need to follow through. I once had a poor buyer and I told her I would pay for the termite inspection if it turned out she could not buy the home. Usually these inspections cost no more than $50 in our area. When I got the bill my eyes popped out since she had chosen a company that charged $150! No matter though. I had told her I would take care of it and I did. My reputation and my word are two of the most important assets I have. (Though next time I may wait to see the bill before I promise:) Once I make a promise I feel compelled to do as I said I would do.

The vast majority of buyers and sellers still do fulfill their contractual obligations. However, I do see that the numbers of those that don't is increasing. Hopefully this trend will reverse itself, but I think that is wishful thinking on my part.

John Elwell - REALTOR

CENTURY 21

Bill Nye Realty, Inc.

813-783-4444

Licensed in Florida

 

Comment balloon 7 commentsJohn Elwell • August 01 2007 09:04PM

Comments

That's what earnest money is for.  I think sellers should have it on deposit too, although it is generally buyers who default.  When a seller defaults, nothing usually happens. 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 12 years ago
Wasn't that the reason we went to written contracts?  Because a man's word no longer meant what it should?  It's a shame that even with an enforceable contract people still try to wrangle their way out.  I hope those buyers who had the sellers change their mind sued them for damages.
Posted by Maggie Dokic | Miami, FL | 305.81.HOUSE (46873), GREEN, CDPE, SFR, Pinecrest | Palmetto Bay | (eXp Realty LLC) about 12 years ago

I've been seeing a lot of it more lately too, or maybe I've been just more sensitive to it because some agents working for me have recently been burned by it and I'm upset vicariously.

On the buyer side at least, part of the solution may lie with the listing agent issuing a notice to perform ASAP to get the buyers to remove their contingencies in a timely fashion.  I'm beginning to think that doing with routinely when the contingency deadline looms is not a bad idea.

Posted by John Lockwood (Lockwood Real Estate) about 12 years ago
HOORAY, Thanks Lenn! I have been expounding that in our office for years Lenn. I say, if the buyer puts up $5,000, let the seller put up $5,000. Then if we get into a situation where one or the other refuses to sign a release of the deposits they both have something to lose or gain. Makes both more likely to negotiate a fair solution. I have always said, what does the seller have to lose if he backs out? And if it is his homestead property here in Florida it takes a lot to force him out. Thank you so much for saying what I have thought for a loooooong time. Of course, everyone in my office says it is impossible, and it probably is. I would love it though.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) about 12 years ago
I wonder if this is more rampant in the big cities? We are a relatively small city here with a large retiree population. So we might actually have less of a problem due to the home grown values of days-gone-by. Will be interesting to hear if it is much worse in the larger urban areas. Might make me feel better, haha. Not really.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) about 12 years ago
Words....are great.  This is the way that things used to be.  But I think that even .... back then.... there were issues.  Contracts are there to force people to honor their words.
Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) about 12 years ago
Larry, that is true. Used to be a verbal agreement was worth a lot. Nowdays, even written in stone many seem to think they mean nothing. Sad commentary on our society. But look at so many of our political figures past and present. I am not sure what the answer is. Perhaps in time things will swing back the other way. Let's hope so.
Posted by John Elwell, You Deserve a Full-Time Agent, Not Reduced Results (CENTURY 21 Bill Nye Realty, Inc.) about 12 years ago

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