If a person is buying a house using a real estate agent, and that person communicated to the agent a certain offer (Example: “I will buy that home for $200,000 if seller pays closing costs, includes the fridge and a rug, and pays for a home warranty to cover the old ass AC”), does the buyer have any recourse at all if these things were not included in the closing documents? If the agent, either through wanton disregard or simple neglect, failed to have these things written out in the closing documents, is there anything the buyer can do to compensate? Is the responsibility solely on the buyer to review the documents and ensure everything is in order? Does the buyer’s agent have any responsibility or duty to accurately represent the buyer? If the buyer is expecting those extra things, and asks about them a month later to find out what is the hold up, and the agent says, “Oooops. Sorry, I forgot to have them added to the contract”. Is the buyer simply SOL due to their own ignorance and/or inattentiveness during the signing of the documents?
Assume the communication between the buyer and seller is documented in writing via email, text message, etc. So there is no doubt what the buyer asked for. Does it matter that the agent messed up since the buyer arguably failed to apply their own due diligence?
My wife is a realtor, I am not. What I have learned from her is that offers with all details about who pays what and what is included are signed by the buyer before the offer is presented to the seller. That is when the buyer needs to look carefully at what is included and excluded. If something doesn’t make it from the accepted offer sheet to the closing documents, that might be the realtor’s fault, or the title company’s, or a lawyer’s. These folks have error and omission insurance to cover that.
It’s a contract like any other. What matters is what the buyer accepts and signs to say they accept. Conversations prior to this, verbal or written are not taken into account.
This. On our recent home purchase our realtor very carefully went over every item on the offer to make sure we understood exactly what was included and who was paying for what, and that she had captured all items which may have been discussed verbally or via email.
Wow. Mine definitely didn’t do that. Wish she had a Yelp page or something…
Another thing to note is that the realtor typically represents the seller. This is always true of the listing agent. (And agent here pretty much means company not person who actually walks around with you). If an agent shows you a house that their company lists, their fiduciary responsibility is to the seller not you, unless you have something like a dual agent agreement.
The seller had her own agent. I thought it was typical for both the buyer and seller to have an agent. This was my Third house, and I’ve used an agent to buy each time. Never had a reason to complain before. This one has me frustrated.
Unlike most negotiations and contracts, there are basically no verbal agreements when dealing with real estate. Everything has to be in writing. The time to negotiate concessions and particulars is before the sales agreement is signed, and everything has to be in the sales agreement. You can no doubt place some blame with your agent, but did you carefully review the written offer and written sales agreement before signing? If it isn’t in there, it is not part of the agreement.
What stage is the sale? Have you already closed?
This has been my experience too. When we bought our Georgia property every back and forth step in the negotiation was in writing and signed. We saw everything that was included, and would have yelled if anything was missing.
When we bought our Washington state property the process was a lot less formal (a FSBO where the seller had no agent). We didn’t have a traditional agent either, but we did hire one for a fixed fee to do some comp work and to draw up some initial offers. We also hired a real estate lawyer to carefully review everything. That was the person who sat down with us and essentially explained in detail the consequences of everything that was in the contract, along with fixing some things in our favor in the title insurance contract.
So at least in my experience if it isn’t in the signed contract it doesn’t exist, and if you sign an agreement with something missing that is nobody else’s problem. I suppose you could have a contract with the agent that states otherwise, or their membership in a professional body forces more complex rules, but I doubt that there would be anything that overrides any contract that you sign.
I think this is the situation. I hope the OP can confirm or correct:**Bear **used a buyer’s agent. The seller used a seller’s agent. The two agents are different people. The written offers and acceptances flowing back and forth between all 4 players (buyer <-> buyer’s agent <-> seller’s agent <-> seller) contained all the ancillary details about fridges, rugs, etc. Up through the final offer and acceptance.
But somehow at closing time those details got left off the closing documents. Those docs only mentioned a house and a price. Which docs Bear signed. So the closing is done and Bear owns the house.
So now he wants to go after the buyer’s agent for dropping the ancillaries Bear also thought he was buying.Is that right?
Our agent had both us (sellers) and the buyer sign something called “Amendment to the Purchase Agreement” that listed in detail all the things we agreed to do to or include with the agreed upon price of the house.
Let me clarify my comment. Legally the agent is the one licensed to practice. Many “agents” who show the houses are not licensed. They simply work for a company in which there is a licensed agent. If the person who is showing you the house happens to work for the listing company, then it is not immediately true that that “agent” is working in your behalf. They may be legally required to be working for the seller and would be bound, for example, to tell the seller if you made a statement like “I’ll offer $250,000 but could go as high as $260,000.”
Assuming my earlier post is right here are several thoughts.
In the US real estate law and conveyance practice varies considerably state to state. You really need state-specific guidance. If your state happens to be one of the weird ones, you really *really *need state specific guidance. Some US states do shit that makes the other 49 just shake their heads. As an example right here, OldGuy (no relation :)) seems to be familiar with a state where buyer’s agents are rare to non-existent.
Complaints about real estate agent performance are typically made to the state real estate regulatory agency. They typically operate a mediation / arbitration / agent discipline kangaroo court system. If you have an issue with the agent, that’s where to start; you may be barred from filing suit in ordinary court. The agreement you signed to hire the buyer’s agent may well contain arbitration / mediation clauses that would also be binding.
Is it a certain fact that the buyer’s agent screwed up here? Might it have been the seller’s agent? The title company? Note that who fumbled the ball is a different question from who should have recovered it but didn’t. You might have a better case against the fumbler for fumbling than you do against your agent for failing to recover the fumble. You also may have to pursue this in different venues depending on who fumbled.
I’ve participated in 4 or 5 closings in various states. In every case the pile of documents included the actual final offer and acceptance forms with all the hand-written changes and signatures. That *IS *the sales contract. The rest of the docs are about paying for it, setting up the new title to it, and dealing with regulatory disclosure stuff.
If that’s true in this case, what are these other docs Bear is saying are missing something?
- There is an plausible legal argument that that hand-written contract forms (with the ancillaries) does represent the actual moment of contract formation and any subsequent writings to the contrary are ineffective. Notwithstanding the parol evidence rule. This commonlaw interpretation might be overridden by specific statue law on real esate closings & conveyance.
I don’t have much to add except that from my experience there is considerable variation between states in all aspects of real estate transactions, so you certainly need to check what advice is applicable to your state.
(Ninja’d by LSLGuy)
I love the blanket statements a number of people are making, most (if not all) of which are false. I also note that no one has yet identified themselves as a real estate agent and offered an opinion which makes reference to the laws of any state regarding their duties and liabilities. The Straight Dope used to be a bit better at serving up truly factual answers in GQ.
Let’s get one issue straightened out right now: the liability of the real estate agent being used by Bear_Nenno to Bear_Nenno, if any, can exist in the absence of anything written memorializing their interaction. So any ability that the OP has to recover damages from the agent would not be limited by the lack of written memorialization of the discussion between them (though the OP postulates that all such communication was, indeed, memorialized in writing).
But the real estate contract between the buyer (the OP) and the seller, which is based upon the offer made by the buyer in writing, and the acceptance (plus any changes via counter-offer, etc.) in writing by the seller, must be in writing (statute of frauds), and interpretation of that contract will be limited to the contract itself, without reference to outside evidence (parole evidence rule).
Here’s where the questions asked by LSLGuy become relevant. Because the closing documents are not the contract, the issue of what to do if they were completed mistakenly is dependent upon what the contract said. And without knowing that, answering the ultimate question Bear_Nenno is asking (What can be done about the fact that there’s no home warranty, closing costs are being split evently, etc.???) is not possible.
Are you confusing agent with broker? Here in Ontario, every real estate brokerage has a broker that is responsible and holds a broker’s license in addition to an Agent’s license. The broker may have one or more agents working for them, each of whom have at least an agent’s license.an agent may represent, but a broker transacts.
I am a real estate agent in the state of Indiana. For my state, the above bolded is correct.
In my state, the closing documents have nothing to do with the contract. The “closing documents” (which is not a legal term of any kind) include the Settlement Statement/formerly HUD (which is basically all the math), the loan documents if the buyer takes out a mortgage, and a bunch of liability releases from the title company. Unless there is a last minute amendment (usually an extension of time) the contract documents are not seen at all.
The details of the contract (appliances, home warranties, etc.) are spelled out clearly in the original Purchase Agreement. Occasionally, there may be amendments to that Purchase Agreement (say, asking for a home warranty after the inspection due to problems found there) but they are attached to the Purchase Agreement, which is the controlling document. Your agent should always be going through this document with you, line by line, before directing you to sign anything. If they don’t, run away. There are tons of good agents out there, and there is no need to use one you can’t trust.
The “closing documents” are prepared by the Title company, and the details are taken from the Purchase Agreement. The Purchase Agreement should be sent to the title company by your agent. And, once the title company prepares the closing documents, they should be sent to your agent, who should be reviewing them very carefully. For example, if there is an agreement for the Seller to purchase a home warranty, there should be a line item in the “closing documents” calculation that says something like “HSA Home Warranrty - $500” debited from the Seller.
Now, Indiana does not use attorneys for real estate transactions, so in your state, some of this work may fall on your attorney.
And yes, the agent has a duty to represent their client, including verifying the details of an offer before it’s signed, working with the co-broke agent to make sure everything is how it should be, and reviewing all transaction documents to make sure they are accurate. People make mistakes - I had a transaction one time where I forgot to include the Home Warranty. You know how it was fixed? I bought the client a home warranty out of my pocket once the mistake was covered. I have heard stories of agents who have bought things like appliances for the same reason - “whoops”.
If this is a real concern, pull out your initial Purchase Agreement and all Amendments and circle where you think any of these things are promised. Take that to your agent and ask them about it. If they do not want to work with you, call the office main line and ask for the “Managing Broker” and do the same. However, be prepared for the possibility that you misunderstood something, and you will get no satisfaction. Ethically and legally, your agent and their brokerage is supposed to represent you in the best possible way, but you hold a large share of the responsibility as well, and if you let something go, or didn’t ask for clarification, or signed a document thinking it would be “all right”, that’s on you.
I am not your agent, I operate under Indiana state law, etc.
Thanks, all. I kind of wanted to keep the OP a bit generalized for GQ, but now that we have had several general answers, I will explain this specific example.
I bought another house in Florida this past Spring. I was stationed in Alaska at the time, so all communication with the realtor was via text messaging and email. Once I found a house (I had my brother look at it on that end to make sure it was acceptable), I made an offer. The seller countered. I declined and sent another offer that was accepted. Communication of these offers was via text, so I know that I didn’t forget to say specifically, “I want a home warranty to cover that old ass A/C in case it breaks in the near future”.
We proceeded with the purchase. When it came time to close, due to the time zone difference, I literally had four hours to receive my email, print the documents, read them, rush to a notary, then over to UPS to drop it all in the mail. I put up a huge fuss over not having time to actually go through the thing, but I reluctantly jumped through their hoops.
About a month goes by and I still hadn’t received warranty paperwork. Then I went off to do some Army training for another month, and then deployed. About 4 months after the purchase, the A/C breaks. I start looking into getting the thing fixed with the home warranty, only to find that I still hadn’t received it. I contact the realtor who apologized and said the title company forgot to put it on the documents, so there was no warranty. I’m not sure if this was true, or if the realtor simply forgot to communicate the warranty during the offering process. Either way: No Warranty.
The realtor explains that they (the title company I think, maybe the seller?) would refund me the cost of the warranty. The realtor said she was going to look into the price of home warranties to see how much money I would be refunded. I responded that I’d rather the A/C be replaced, but since I have some responsibility in all this, I would happily accept their offer of a refund for the cost of the warranty. I never heard back from the realtor after that! I emailed her three times since then and she is not returning my emails! I’m not even that mad about the warranty fee, I don’t think they cost that much (like 500 bucks or something?). So it’s not a ton of money. I’m just a little pissed about her not returning my emails, especially after she said I’d get a refund. And I’m pissed about how the whole process went down. And I’m pissed at myself. I was just wondering where the fault lies before I go and make a big deal about all this or just forget about it. If it’s 100% on me, then okay. Though, she did say I was entitled to a refund and then stopped responding to my emails…
FWIW, I bought my other two houses site unseen as well. And I had no issues at all. I bought a house in Georgia while living in Italy, and bought a house in Tampa while living in Germany. So the whole process was not completely foreign to me. But it does seem like it’s a whole different scenario and experience each time.