We often hear stories about buyers defaulting on contracts to purchase real estate.  They “walk”, they don’t deposit their earnest money, they don’t apply for their mortgage on time, they don’t close by the closing date.  But how often do you hear about SELLERS defaulting?

First, let’s get the definition of default. According to the Florida Association of Realtors Residential Sale and Purchase Contract, Default is: “Seller fails, refuses or neglects to perform this contract”.

I am not an attorney, and please consult with one, but some examples of what seller default might be:  failing to act on a required repair item, neglecting to remove tenants if specified in the contract, refusing to close.

Well, I had two cases in the last week.  One example: I represent the buyer and the seller has decided not to do a required wood rot repair.  The seller claims “he has done enough improvements” and is not doing any others.  “The buyer should be happy.”

According to the Florida contract, in the case of seller default, the buyer may “choose to receive a refund of buyer’s deposit, without waiving the right to seek damages, or to seek specific performance”.  The contract goes on to outline the methods of dispute resolution.

The question is, with such a “minor” default, who would bother?  If the wood rot is $100, should the buyer delay the closing to go through mediation, especially when he needs a home?  If the seller did not leave the house broom-clean, if he failed to remove tenants on time, if he removed a small “attachment”, should the buyer go to arbitration?  If the closing were delayed a few days, and their is no per diem penalty paid, oh well?

In Florida, on both the buyer and seller side, these are not uncommon occurences.  The problem is, if no one enforces the contract, nothing will change.  You see, it is not normal custom in Northwest Florida to have individual attorney representation for our closings, like many other states.  Thus, in the case of a default, the buyer or seller would have to spend extra monies to hire an attorney.  They usually won’t.

That is why Florida real estate transactions tend to have many of these nuisance defaults, and no one bothers. What say you?

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Seek LEGAL COUNSEL for any contract concerns.

Email Wendy: itswendy@rulnickrealty.com

The post What Would You Do If The Seller Defaults? first appeared on Rulnick Realty.

“Did you get the contract signed by your seller?”  The offer expired yesterday!

“Why won’t your buyer sign the document?”  We need it now for short sale approval!

“Your seller did not sign the earnest money release!”  We’ll go to court.

Guess what?  You cannot make your buyer or seller DO anything.  You can relay a message.  You can make a suggestion. You can advise they speak to an attorney.  But you cannot MAKE them do anything.  

This week I had two unfortunate calls from other brokers.  One stated his buyer would go to court and it would be “ugly” if my seller does not sign a release of contract.  The other broker called one of my agents and threatened that if our buyer didn’t sign a document, he would be in violation of the contract.

Well, you know what? That is not my decision nor your decision to make.  That’s the buyer’s or seller’s decision.  They can choose not to sign, they can choose not to respond by deadlines and they can choose to take no action.  All you can do is tell them what the deadlines are (that they should be able to read on their own) or relay a request.  Sure, you can relay a threat, too. 

All too often I see agents act like attorneys.  I see them get emotional and insert themselves into contracts.  They are treading on dangerous territory.  The Realtor Code of Ethics states we cannot practice law. 

Article 13

Realtors^® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

So, skip the strong arms tactics. We all wish our sellers and buyers would comply with contracts and deadlines.  Sometimes they don’t.  Leave the deciding to the client.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

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The post You Cannot “Make” a Buyer or Seller Do Anything first appeared on Rulnick Realty.