Recently there was an article on the front page of the paper about a buyer who got out of a contract to buy a multi-million dollar home by suing the seller, just days before closing. It turned out that the buyer never had the ability to close, but managed to finesse the agents into showing the property, and the seller into accepting an offer. It turned out that buyer was in foreclosure on another property, had a judgment for over a half-million dollars in California, and had filed for bankruptcy half a dozen times.
During the fiasco that ensued, the seller got an offer from a legitimate buyer who could close but couldn’t go forward because of the first contract. The suit ended with the seller paying hundreds of thousands of dollars to the “broke” buyer “to get out of my life.”
While this was surely a nightmare, it’s not alone. Over the years we’ve seen buyers and sellers getting into lawsuits that went on for years, one where the buyer and seller got together to go around their real estate agents “to save the commission.” By the time it was over, the controversy had also enveloped a shipping container full of antique furniture, sent from England as part of the deal. The truth is that the parties were probably posturing to screw each other from the very beginning.
In yet another, the guardian of a disabled child saw a big money judgment come in from a personal injury lawsuit and decided that she (the guardian) could use much of that cash to buy a fabulous new home, ostensibly to house the child. It never occurred to her that the court supervising the guardianship would never permit such a purchase with the trust funds of the ward. That lawsuit had just started up when a big storm caused relatively minor damage to the house, that started another whole controversy over that.
There are two common threads here. One is the misplaced optimism people often feel when they think they have a deal, that “their ship has come in.” The other is the many things that can go wrong when a closing is delayed, even for a little while.
Life is complicated – so is real estate. There are a thousand details. And even though it may seem like contract law is unnecessarily obtuse, there are good reasons for the way things are done.
Talk to a real estate lawyer, before you sign any documents. And listen carefully to the advice.