Misrepresentation by Broker
I am presently in a 3 month listing agreement with a broker who has not been able to close the escrow I have with a buyer. My broker states that the buyers appraiser appraised the property $10,000 dollars short of the agreed offer ( this was conducted 2 days after the proposed escrow close date). As a result the escrow that was supposed to close 3 weeks ago is still open. My broker has advised me all along during the course of the proposed escrow period that all the comps and buyers funding issues were satisfactory and escrow would close on the expected date. We were allowed 3 days after the proposed close of escrow date to move, which was done without notification otherwise, and now are in a lease agreement at another location. I feel my broker violated the trust that was given to him, and I was misrepresented. I have requested a termination of the listing contract which he has refused to sign. As a result we are paying for two homes with resolve to our open escrow. Do I have any legal protection in this matter?, and if I sign a cancellation to the escrow and the buyer refuses what is my recourse?
1 Answer from Attorneys
Re: Misrepresentation by Broker
It is not at all clear that your broker deliberately misrepresesented anything, unless he knew that your property would not appraise at the sales price; if the buyer needs to get a loan in order to buy the property, and even if the buyer has excellent credit and loan approval in teh necessary amount, etc., the property you are selling him has to be appraised by that lender as worth at least the value of the sales price, or else the lender will not make the loan. With respect to escrow closing on time, rarely do they ever close on time, and until a loan is FUNDED, i.e., the lender has actually deposited the funds into escrow, the closing date cannot be accurately determined, only estimated. With regard to escrow, it cannot be unilaterally cancelled; both the buyer and seller must agree to cancellation, and where they cnanot agree, then legal steps would need to be pursued, including arbitration, etc. I am not surprised that your listing agent refuses to termiante the contract, as he has already performed in accordance with the contract and is entitled to a commission if the sale is completed.