No one likes airing dirty laundry, but when you’re talking lawsuits, you’re talking public record.
I was dong some research on the Suffolk Deeds site and came across a suit filed by a potential buyer against the seller of a unit in the Ritz Carlton towers (2 Avery Street).
The gist of it seems to be, the owner listed his property for sale through a real estate agent. Within a couple weeks, a buyer made an offer through his own agent, using the standard “Offer To Purchase” form used by just about every agent in the city (and world?).
The owner signed the offer.
There was subsequently a home inspection, and then, apparently, some negotiation on terms. The sides agreed to the changes, according to the lawsuit, and a draft purchase and sale contract was drawn up. The buyer signed the contract, and sent it on to the owner, within the time-frame set forth in the offer.
The owner did not sign the P&S.
The buyer is now suing to compel the owner to fulfill his obligations as set forth in the Offer. Meaning, sell him the unit.
What does this mean to you and me?
Well, I’m not an attorney.
What usually happens is, an offer to purchase is signed by buyer and seller, then a couple weeks later, a purchase & sale contract is signed. The P&S, for all intents and purposes, replaces the terms as set forth in the offer. If both sides sign a P&S, then the seller is compelled to close on the purchase. The buyer is compelled to close on the purchase. If the buyer doesn’t close on time, the seller can take any deposit put down upon signing of the P&S. If the seller doesn’t close on time, the buyer can sue. (The seller can sue the buyer, too, if the buyer doesn’t close, usually. Most often though, the seller just takes the deposit and walks away, to find another buyer.)
(The P&S contract should be specific in what happens if either side fails to comply with the contract – if you are a buyer, you want the contract to say something like, “if buyer doesn’t close, any deposits will be forfeited, but no further moneys will be required,” or something like that. This way, the seller can’t sue you for any out-of-pocket expenses or losses due to a subsequent sale at a lower price.)
However, whether or not the offer is binding is not as clearcut. There have been lawsuits over the years that have favored the rights of the buyer (this lawsuit references one of them, in fact), but each case is unique.
What you need to know if you’re buying real estate is, if you make an offer, and then back out for no reason, usually the only thing you’re going to lose is your $1,000 deposit. The seller, on the other hand, is almost always required to go through with the deal, no matter what. He/she can’t just return your $1,000 and say, “see you later”, not even if he/she gets a higher offer.
I don’t know what happened in this case, specifically. Did the seller get a better offer? Did the seller have second thoughts? Did the seller end up not having somewhere else to move?
Most buyers would get mad, then move on to another property, feeling it’s not worth the time, effort, or expense, of filing a lawsuit.
It will be interesting to see what happens!
(If you are interested in reading the documents in the lawsuit, search on Jackson Loomis on the Suffolk Deeds site.)