Agent is sued for not finding cemetery site near the property

[littleJoe]

If the agent was not informed in advance by the buyer that properties in close proximity to cemeteries were to be excluded from all property searches, the agent cannot be held responsible for the buyer’s breach of the purchase agreement.

A buyer potentially could be forced to complete the sale per the terms of the purchase agreement but “specific performance” is rarely court ordered in regular real estate transactions. Instead, a buyer who backs out of a signed purchase agreement would typically forfeit their earnest money deposit, which is a small percentage of the selling price of the property generally submitted to the seller along with any offer to purchase.

If the seller were to take this buyer to court, the court could conceivably order the buyer to pay the seller what should have been paid when the offer was presented (the earnest money).

The purpose of earnest deposits is for just this type of situation, where a buyer decides to back out of a signed purchase agreement. The earnest money deposit is to compensate the seller for the loss of time the house is off the market and for any potential lost sale.

Thank you, Quincy! Yes, that's what is happening now, th buyer's litigation attorney already told the buyer, he has little chance to win in court, so instead, they try to settle with the sellers. But also try to bring the buyer's agent into it.

 

[adjusterjack]

LittleJoe, I posted this conversation on a real estate forum. Several realtors responded, including one from MA, that they agree that the buyer agent likely has no liability.

 

[quincy]

Thank you, Quincy! Yes, that's what is happening now, th buyer's litigation attorney already told

The buyer should accept what his attorney says and try to settle with the seller. In most purchase agreement breaches, the buyer would be forfeiting his earnest money deposit if he backed out of the signed purchase agreement.

What the buyer’s agent could do is let the buyer/buyer’s attorney know the amount that should have been collected at the time the offer was first submitted, and the buyer can use that amount in his offer to settle with the seller. I am not sure the seller could expect much more than that.

 

[adjusterjack]

Thank you, Quincy! Yes, that's what is happening now, th buyer's litigation attorney already told the buyer, he has little chance to win in court, so instead, they try to settle with the sellers. But also try to bring the buyer's agent into it.

How much money is at stake? Give me a dollar amount please.

In other words, how much money does the seller want from the buyer?

How much money does the buyer want from his agent?

 

[quincy]

In addition to those questions, what was the sale price of the property? What amount was offered by buyer and accepted by seller?

 

[littleJoe]

LittleJoe, I posted this conversation on a real estate forum. Several realtors responded, including one from MA, that they agree that the buyer agent likely has no liability.

Thank you and this is very encouraging!

 

[littleJoe]

The buyer should accept what his attorney says and try to settle with the seller. In most purchase agreement breaches, the buyer would be forfeiting his earnest money deposit if he backed out of the signed purchase agreement.

What the buyer’s agent could do is let the buyer/buyer’s attorney know the amount that should have been collected at the time the offer was first submitted, and the buyer can use that amount in his offer to settle with the seller. I am not sure the seller could expect much more than that.

Yes, the buyer's attorney said he will try to settle with the seller's attorney before the court. The seller asks for the 5% deposit to be paid per P&S.

 

[littleJoe]

How much money is at stake? Give me a dollar amount please.

In other words, how much money does the seller want from the buyer?

How much money does the buyer want from his agent?

The seller is asking for 5% (Under $40,000) as the deposit to be paid per P&S. The buyer or his attorney hasn't given the amount yet as they need to settle with the seller first. In the worst case, the buyer needs to pay full 5% to the seller, then the buyer will ask for compensation from the agent in full or in partial.

 

[quincy]

The seller is asking for 5% (Under $40,000) as the deposit to be paid per P&S. The buyer or his attorney hasn't given the amount yet as they need to settle with the seller first. In the worst case, the buyer needs to pay full 5% to the seller, then the buyer will ask for compensation from the agent in full or in partial.

The earnest money is typically paid by the purchaser to the broker or attorney for the seller and not to the seller directly. The earnest money deposit is held in escrow until closing.

The amount of the deposit is negotiable, with deposits ranging from as low as 1% of the selling price to possibly as high as 10% of the selling price. In a hot selling market, 5% would not be unusual.

The money is considered liquidated damages if the purchaser defaults on the signed agreement.

I can see a possible mistake made by the buyer and his agent, which could have been avoided with a properly-worded purchase agreement. Adding contingencies to the contract can help a buyer legally back out of an agreement without penalty. A purchase offer that is contingent on certain factors (like financing or inspection), however, might not be accepted by a seller. It is a bit of a crap shoot.

Offhand I do not see that the buyer has any support for a legal action against his agent if he is basing it solely on the fact that the agent did not disclose the location of the cemetery. I do see support for a legal action against the buyer by the seller.

 

[Zigner]

...th buyer's litigation attorney already told the buyer, he has little chance to win in court, so instead, they try to settle with the sellers.

How do you know what was discussed between the buyer and his attorney?

 

[adjusterjack]

How do you know what was discussed between the buyer and his attorney?

Probably this:

5) I am related to this poor agent;

I'm guessing that the agent has been relaying information from the buyer's attorney who apparently put the agent on notice of a potential claim and is keeping the agent advised (with the consent of his client) of negotiations with the seller. Perhaps the attorney's goal is to have the agent voluntarily kick in some money.

Again, just guessing.

 

[Zigner]

Probably this:



I'm guessing that the agent has been relaying information from the buyer's attorney who apparently put the agent on notice of a potential claim and is keeping the agent advised (with the consent of his client) of negotiations with the seller. Perhaps the attorney's goal is to have the agent voluntarily kick in some money.

Again, just guessing.

I read it to mean that the opponents attorney and the opponent had a conversation in which the opponent's attorney told the opponent that the opponent's case was weak. That's why I wondered how the OP is privy to the privileged communication(s) between an attorney and his/her client.

 

[adjusterjack]

The seller is asking for 5% (Under $40,000) as the deposit to be paid per P&S. The buyer or his attorney hasn't given the amount yet as they need to settle with the seller first. In the worst case, the buyer needs to pay full 5% to the seller, then the buyer will ask for compensation from the agent in full or in partial.

The agent has knowledge of a potential claim against him for a great deal of money based on an allegation of wrongdoing. He must notify his Professional Liability (E&O) insurance company. Otherwise he is placing his insurance in jeopardy and his insurance company could deny the claim and a defense for lack of compliance with the policy requirements.

 

[quincy]

The agent is unlikely to be found liable unless there is far more to the story than the agent has relayed to littleJoe, which is a possibility.

 

[FarmerJ]

Had the buyer made a offer with a contingency written to say there were no known graves with in X number of feet of this address and the seller did not tell the buyer then the buyer would likely have some room on this to argue their refusal to close , but if they didnt do that in writting then I suggest they use the links here to find a attorney and let a attorney tell them the odds of winnin.g