Legal Question in Real Estate Law in Nevada
I made an offer on a house I though was for sale with a major real estate agency. The house in question was owned by a woman that had just passed away but I was told by the real estate agent she had given her son power of attorney when she was living and he would be signing for her. Now I find out that since she is no longer living it seems he does not have power of attorney any longer and the house must now go thru probate since the mother had left it to him in her will- a lengthy process which could take months.
My offer was cash with an anticipated close of 2 weeks time and the "seller" son signed the contract agreeing to this closing timeframe as well.
The son signed the contract with supposed "power of attorney" AFTER the mother had passed when in fact he had no right to sell even from the point of contractual inception. He had a licensed real estate agent guiding him thru this process as well. I had a home inspection performed which cost me $300 dollars and the inspector found conditions in the home which caused further negotiations .We were in the middle of re-negotiatiating price when I found out he actually had no right to sell from the beginning nor even negotiate the price and the house would never close on the agreed upon date for which we had both signed. Still my money has now been tied up in escrow.
I have already given my 30 day notice and my boxes are packed I am ready to move out. I find this all out days before anticipated close but now I must stay at least an additional month ?? if not longer and begin my homesearch process again with the frustration of not only searching for another suitable residence but submitting offers and going through the multiple offer/acceptance process as well.
Is the sellers/agents ignorance in this matter something that they can be held accountable for? Am I entitled to my earnest money back immediately or must I go thru legal process since the "seller" son had no actual "right" to accept my money in the first place?? Does he now have any authority what-so-ever governing giving it back to me?? I also now have to pay an additional $2000 dollars MIN for at least another month rent where I am currently staying due to this fiasco. Not to mention hopes and dreams of homeownership shattered as well as all my time and frustration in this matter. Can I hold the seller or the real estate agency or it's agents liable in this situation? Any advice would be greatly appreciated. Thank You.
1 Answer from Attorneys
It is a relatively common problem we Nevada attorneys see -- real estate agents who act as though they know the law and conduct themselves, and advise their clients, in ways that no sensible attorney would EVER suggest. It is well known among educated lawyers that power of attorney dies with the giver. The presumed seller of the house had absolutely no legal authority to offer it to the marketplace. His acceptance of your good faith offer was void ab initio (from the beginning), so you certainly are entitled to back out and seek damages from him, his broker and their respective insurance companies. They may try to cover their anatomy by offering to allow you to occupy until the probate court allows the sale to go forward. The inherent problem with this suggestion is that you MAY NOT be the high bidder when the property is offered in probate court and others show up to try to buy it! Don't get roped into that one!
I suggest you demand full return of your earnest money, the expenses you paid up front (including, for example, the inspection fee), and any costs you incurred that you would not have faced had you not made the offer on this property. You cannot, under normal circumstances, seek emotional distress damages in a contract-based suit, but if you passed on another great buy, there may be "opportunity lost" damages for the deal that got away.
Next time, HAVE YOUR OWN REPRESENTATION in all real estate transactions. In all likelihood, the broker who listed the house AND the broker who showed it to you (if that is the case) were both working for the interests of the seller and being paid by him. They both got duped by their ignorance of the law and did not appropriately advise you in the purchase. If you had retained a "buyer's broker" to be your advocate you might not have made this mistake, possibly would have gotten an even better price, and what the inspection revealed would not have required a "renegotiation" of the price, since that provision should have been in the offer when written.
The broker has "errors and omissions" insurance (like malpractice coverage) for such mistakes, and you should be made whole without having to resort to litigation. Let the broker's insurance company chase down the lying (or mistaken) "seller" and try to recoup what it must pay to you.
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