Not seeking legal advice, you are not my lawyer, this is all hypothetical.
Can a home seller legally refuse a sale of a home to prospective buyer for whatever reason? Probably not if it’s a bad reason (he’s black), but what if it’s a good reason (he wants to convert this beautiful old mansion to rental property; or, he looks like a hobo)?
If he can’t legally refuse the sale, what if he changes his mind (I’ve decided not to sell) and then 30 days later puts the house back on the market (I’ve changed my mind again. Go figure.)? If he did that, would he be open to civil and/or criminal penalties?
Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination by homeowners and real estate firms. However proving that a homeowner decided not to sell a house to someone because of their race is very difficult.
A homeowner is:
Not required to sell a house at all, and can always take it off the market assuming no contracts have been signed
Not required to sell a house to the highest bidder
Not required to sell a house to someone based solely on economic factors
Because of those three things, it’d be hard to prove a case against an individual homeowner. With discrimination law against a corporation such as a real estate firm, it can be easier because you can show a pattern of behavior and how they treat similar persons of one race versus similar persons of another race. Since the homeowner is most likely selling a single house it’d be difficult to demonstrate they took the house off the market to avoid a black person buying it or that they decided to sell to one person over another because of race; since they can legally sell based on non-economic factors there are a lot of non-race reasons they could bring up in any sort of suit.
It’s a bit impractical. The buyer and seller don’t meet until closing. By that point, a lot of money has been spent preparing for sale. There are also penalties for breaking an accepted offer that differs from state to state.
There’s no requirement for this to be true, and it frequently isn’t. Nor is it the case that failure to meet a prospective buyer prevents a selling from learning enough about him to conclude that he’s undesirable (for whatever reason).
The issue might be with your real estate agent. I believe that when an offer is made for the full asking price if you refuse it they can sue you for their commission.
It wasn’t in my case. I bought my house from my across-the-street neighbor. Had known him and his family for four years. In fact, it wasn’t even on the market; I’d heard through the neighborhood grapevine that he was building a new house and would be looking to sell soon. So I banged on his door and asked if that filthy rumor was true. I had to convince my realtor to go look at it (because it wasn’t listed), but I had my offer accepted within one week of pitching the idea to the seller (I’ll buy your house!).
So in this case, the sellers actually had quite a bit of information about their buyer and could have refused totally without repercussions because they hadn’t listed the property or even placed a “FSBO” sign in the yard. I basically stole my house off the market in the middle of the night.
Irrelevant yo the question asked (though obviously a financial concern to the seller). If the agent’s contractual obligation wasw to fuind you a buyer willing to pay your listing price, and he does so, he is entitled to his commission. This does not however mean you must sell to that buyer.
You can sell your house to anyone you want (your cousin, your co-worker, the person who wrote the best essay for why they should get to buy your house…) for whatever price you want.
What you can’t do is:
1 . Refuse to sell or raise the price because the potential buyer is one of the protected classes (their race, religion, etc.).
2. Back out of a contract (without penalties, anyway). Typically (in the U.S. for open-market sales) there are several steps where it becomes harder for either the buyer or seller to back out without bigger penalties, starting with when the seller accepts an offer from a buyer. Typically in the U.S. the seller won’t have met the buyer (because, usually the seller only cares about the price) before the buyer makes an offer. But there’s no legal requirement to do things this way: you could certainly interview potential buyers about their plans for the property before you accept any offers.
So yes, it’s perfectly legal to sell your house only to someone who you think has enough good taste to maintain it esthetically. It’s perfectly legal to refuse to sell your house to someone who insulted your dog or whatever, even if they’re offering more than the nice guy who you do end up selling it to. Just don’t reject someone because of their race, religion, etc.
This is true because I saw it on the “Mary Tyler Moore Show.”
Which leaves me to ask, isn’t a commission ususally a percentage of the final sale? What does the agent get then, what would’ve been paid?
Also speaking of TV, rember when Lucy Ricardo didn’t want to move so she and Fred and Ethel dressed up as gangsters to appear undesireable so that the people would take back their offer to sell the house?
The anti-discrimination laws are new. Back in the 40s, when my parents tried to buy a house in a certain suburb of Philadelphia, they were refused because all deeds in Yeadon banned selling to Jews (and surely blacks as well). Moreover any deed you made was required to include the same clause.
It was common for deeds in some areas to contain covenants banning the sale of the properties to Negroes, Jews, and/or other minorities until a SCOTUS decision (in the 1950s, IIRC) stated that such covenants were unenforceable. Legally, if it were not for the unenforceability, once one deed in the chain of title contains such a restrictive covenant, subsequent deeds did not have to contain the same covenant. The covenant runs with the land.
The real estate agent is entitled to his commission because he has a job to do, and if you turn down whoever he found for no good reason, well, he’s done his job and fulfilled his contract. Mind you, it depends on the wording of the contract. Similarly, if he shows the hosue to a prospective buyer, then a bit later when the listing is expired, the guy makes a deal with you, as the person who first found the buyer, likely his contract specifies you must pay him a commission.
The first thing your RE agent does is prsent you with an ofer to purchase. You may accept or decline. Usually, the decline is because the price is too low or some conditions are unacceptable. The conditions may include “if I can get financing” or “subject to a house inspection”, or may be something like “if you replace the crappy old furnace with a modern one…”; if declined, they negotiate back and forth. Many conditions are negotiating tactics, because if accepted this can take the house off the market until the buyer weasels out with “I did not get financing”. One of the RE Porn shows (“MIllion Dollar Sales”, IIRC?) had the tactic where the house inspector finds flaws like “basement wall is cracking” and the buyer uses that to ask for a lower price.
The reason the buyer and seller should not meet - I had a friend who sold his house the same time I did. To settle the price, the buyer and the RE agent (working for both of them!!) sat down over the kitchen table with him and hashed out the final sale. As my RE agent said, the danger is that whatever you say in that situation, even in casual conversation, can be taken as misrepresentation. If you simply said “it’s a great house, no problems” then any little problem can be grounds for a lawsuit. If you leave it up to the agent to handle all contact, then there is deniablity - here’s the survey form, you never asked about backed up sewers or leaking roof, or here’s what the seller said about cracked baement walls…
Yep - we asked that, 20ish years ago when we were selling for the first time, and he said that in general if they brought a full-price, no-contingency offer to the table, they’d be entitled to their commission if we refused to sell (which never even remotely a concern, we were just curious).
The case voiding restrictive covenants that involved racial discrimination was Shelley v. Kraemer (1948). The article suggests that some HOA covenants used in a discriminatory manner could be voided on the same precedent.
The case did not void such agreements. The 14th Amendment did not apply between private parties, only to the states. It specifically held that the restriction was valid, but could not be enforced because such enforcement would involve the state:
Of course HOA covenants of a similar nature would also be unenforceable.
Is it mandatory to involve a realtor in the US? My friend here in the UK just sold a property she inherited to a family we met through different means, thus avoiding a huge commission fee. She did use a solicitor (a kind of lawyer in the UK) to do the paperwork (though again this is not mandatory for those brave enough to go it alone). Do US realtors perform that function also?
In the United States Realtor® is a registered trademark of the National Association of Realtors®. Only a member of this association may refer to him or herself as a Realtor®.
But to answer your question, no it is not required that you use a Realtor® or a generic real estate agent in the United States. Many property owner do prefer to sell on their own for the same reason your friend did.
No, but there can be many advantages to doing so. Just like it’s not mandatory to hire a lawyer to go to court, but it’s usually a very good idea.
This varies according to the state, but in my state, an agent can become a representative for the buyer if the buyer wants. If you are not an agent yourself, you may not be aware that this job can be a LOT of work (and liability) for very little pay.
