Buyer Protected By Ratified Contract?

Added March 20, 2009 by Ilyce R. Glink

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Summary: A home buyer had an offer accepted to purchase a condo with a ratified contract. After accepting, the seller wants to counter the buyer’s offer. Whether both sides signed the contract and what they signed to will direct this buyer on how to proceed.

Q: Help! I recently put a contract in for a condo, bidding $20,000 less than the asking price with 3 percent back at closing. I felt the place needed work and had been on the market for 6 months. The seller accepted.

The next day, my agent was contacted by the seller’s agent to say the seller had not understood the terms and wanted to counter. They came back with a full-price offer and the 3 percent.

We maintained we had a ratified contract. They dropped $10,000 with the 3 percent. The seller's broker sent me what amounted to a heaping dose of emotional blackmail about how the seller is an old woman who had several strokes, etc., (although she had her agent AND a family member there to explain everything...and just lived in the unit alone until very recently.)

Although I feel terribly for this woman, I also feel like if I have come back and said I decided I could only pay $10,000 less, they would have laughed and pointed at our ratified contract.

Shouldn't this piece of paper protect both sides?

A: You should talk to a real estate attorney about what kind of deal you actually had with the sellers. If they signed your contract, then you might be able to sue them for specific performance -- that is, living up to the agreement they signed. If they didn't sign it, well, oral contracts don't hold up in court.

The truth is, you can spend a lot of money in court trying to force them into selling you the condo (and you may not win). Or you can walk away and see if they become desperate enough to take your offer. If not, it's a buyer's market out there, and you will certainly find another house to buy.

Stick to your guns, and don't overpay for property in a declining market.

A real estate attorney can guide you on your legal options and explain how your contract protects you.

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