Agent Sells Property to Another Buyer, after Seller and I Reached a Sale Agreement

LKim007 on 20/01/2020 - 19:55
Last edited 22/01/2020 - 09:15 by 2 other users

16th Jan 2020: Terry (seller) agrees to the sale of his property with certain conditions via email.

Email extract: "I have been thinking over your proposition outlined in the email (16 January @6.14am) and have decided to go it alone with the sale to you. My settlement agent will be involved in handling the required paperwork up to settlement."

Terry and I had an agreement to meet on 20th Jan 2020 to proceed with the formalities.

Terry got the agent, from ACTON Mount Lawley, to still open the home for inspection on Saturday 18th Jan 2020 (after agreeing to the sale of the property).

Terry got back to me on Monday 20th Jan 2020 before our 4pm meeting to say that he has accepted another offer despite having accepted my offer.

Email extract: "Please be advised that following an “Open house” last Saturday I have agreed to an offer to purchase <<property address removed>>. In that regard I wish to cancel our scheduled meeting for this afternoon".

What advice would you give to deal with the current situation? Thank you in advance. I still want to go ahead with the purchase at the agreed conditions.

Financial

closed Comments

  • ozhunter on 20/01/2020 - 19:57
    +100

    I still want to go ahead with the purchase at the agreed conditions.

    Find another house to buy.

    The seller owes you nothing, you never had a contract.

  • Hybroid on 20/01/2020 - 19:57
    +15

    Nothing. You had no agreed executed contract in writing so he's free to deal with anyone at anytime.

  • Alexander420 on 20/01/2020 - 20:00
    +6

    Gazumped, just move on. Seller can even "walk away" or sell to another buyer with better offer after exchange contract but before settlement day.

    • HighAndDry on 21/01/2020 - 08:27
      +4

      That's…. practically true but legally full of issues.

      • Chandler on 22/01/2020 - 11:17

        legally full of issues

        Most contracts (should) have a clause that makes it very easy for you to (try to) get out of it.

        And even if the buyer suspects it's bullshit, it's not worth the hassle to pursue.

  • Tee Rex Arms on 20/01/2020 - 20:00
    +13

    Buy some king browns that are on sale atm and get looking for your next house because this one ain’t yours.

  • elgrande on 20/01/2020 - 20:09

    You cannot enter a contract to enter a contract, so you do not have any recourse..

    Why did you not go through the agent out of interest?

    • Kim007 on 20/01/2020 - 20:34

      The seller was not happy with the initial offer price of $x10. He countered me to a private sale of $x22 without the agent (as he would not have to pay the agent fees and he was ok with the $x22 that he wanted). He would have had to sell it for $x35 via the agent to obtain the same sale proceed after paying the agent fees.

      • whooah1979 on 20/01/2020 - 20:40
        +25

        as he would not have to pay the agent fees

        The vendor has signed a contract with the REA that would see them get their cut from the sale even if you purchased the property.

      • ihbh on 20/01/2020 - 20:44
        +31

        No can do.

        You cannot go behind the agents back like this while the property is listed with him. Also, technically, if you saw it while it was listed with him, the seller will still have to pay him the commission. You had to wait until after the listing agreement expired to do anything you proposed.

        Next time you try to be too smart, make sure you don't shoot yourself in the foot.

        • AlanJ on 21/01/2020 - 17:34
          +6

          whooah1979 and ihbh are exactly right. The agent, I would imagine, has swiftly put the owner right on this matter, and the owner is suddenly faced with an embarrassing situation, the only way out of which is to write to you and renege. I wouldn't mind wagering that if you keep an eye on the sale you will find that this "open house" offer has suddenly fallen apart, as its main purpose was to give you a plausible excuse for why the owner broke his word. He has learned his lesson, and, unfortunately you are the one who can't "pass it on" and has to wear it. Fortunately, there is always another house just over the horizon, and next time you will assure yourself that it isn't in the hands of any agent before you enter into any agreement, verbal or otherwise.

      • Randolph Duke on 22/01/2020 - 09:22
        +3

        This seller sounds like a stand up person all round

    • hybridex on 22/01/2020 - 16:08
      +1

      You certainly can enter into a contract to enter into another contract, but it is tricky, unusual and becomes fraught especially when dealing with property.

  • JimmyF on 20/01/2020 - 20:14
    +2

    What advice would you give to deal with the current situation?

    Keep house hunting, no contact had been signed, no deposit had been made.

    The 'seller' has widthdrawn their offer of sale, you need to contiune looking.

  • vivviv10 on 20/01/2020 - 20:16
    +4

    Go back with a higher offer .

  • TheBilly on 20/01/2020 - 20:31
    +11

    The best example I can give you is. Somebody messaged me on Gumtree saying they would like to offer $15 for my pot plant and would like to meet with me to finalise the sale, I agreed that I would sell it to them for $15. Between that and the time they planned to come somebody offered me $15.50 but they came right away, and I sold it to them instead. Replace pot plant with house.

    • zonra on 20/01/2020 - 20:47
      +15

      I hate Gumtree/Facebook sellers who do this.

      • TheBilly on 20/01/2020 - 21:27
        -2

        First in best dressed

        • MementoMori on 22/01/2020 - 14:03
          +3

          Only to a point.

          If you're a person of your word, you should give the first buyer a reasonable amount of time to complete the purchase.

          • TheBilly on 24/01/2020 - 08:55
            -2

            @MementoMori: Why?

            Would you give the seller a reasonable amount of time to get a better price? no you would most likely negotiate the best deal and terms for your interest. I.e. cheapest price, paypal, delivery, longest payment time. But when a seller looks after their interest it's dishonest?

            I just recently underwent an online moving sale as we are downsizing - used Gumtree and Facebook mainly. To say that everyone I dealt with were a**holes is an understatement. The amount of buyers that don't show is significantly larger than the amount of sellers that don't hold their word.

        • oznate on 22/01/2020 - 15:36

          Yeah this is rubbish behaviour, especially if you don't give the first person you dealt with a chance to match the price/time frame.

      • wetsandwich on 22/01/2020 - 09:49
        +19

        I have no shame in doing it because the $15 guy NEVER turns up.

        • TheBilly on 24/01/2020 - 09:03
          -1

          So true

    • elgrande on 20/01/2020 - 21:14
      +10

      Replace pot plant with house.

      … cheap house at $15.50!

      • TerryJustTerry on 22/01/2020 - 08:32
        +1

        Second hand well used Barbie house

      • TheBilly on 24/01/2020 - 09:03

        Exactly… original caller should have snapped it up and not lingered.

  • p1 ama on 20/01/2020 - 20:44
    +15

    To be perfectly honest OP, you need to be way more vigilant if you don't want to get hosed like this in the future. You have no recourse. No contract was signed. The seller never agreed to sell it to you, just agreed to meet with you.

    1) The seller agrees to sell you the property on 16/01. Why did you agree to meet four days later to sign the contract? I would have signed the contract right there and then on 16/01. When I bought my place, I met up with the agent at their office a few hours after agreeing on a price with a cheque for the deposit. Signed there and then.

    2) If the seller has already agreed to sell to you, why is the seller conducting an open house on 18/01. Why didn't you say anything about it? Why weren't you there at the open house to make sure the seller knows that you're committed to buying?

    Basically, my theory is that the seller wanted to sell quickly, and happened to have an open house coming up. He didn't want to risk not having a sale after the open house, but also didn't want to miss out on a potentially good offer from the open house either. Therefore, he "agreed" to sell to you and scheduled the meeting with you after the open house so that he can sell to you if he didn't get a better offer.

    Essentially you were his backup and he found someone better.

    • Kim007 on 20/01/2020 - 20:51

      The seller would have known that he had an inspection on Saturday and said the earliest he could meet is Monday 4pm. He bought himself the time to consider other offers. I was not aware until Saturday morning that he had the home opened for inspection when I checked the property again on realestate.com.au.

      • p1 ama on 20/01/2020 - 20:55
        +13

        Exactly my point - he completely hosed you and used you as insurance and you didn't even know it.

        • Adz81 on 21/01/2020 - 12:45
          +1

          Spot on… OP was the Moped that would only get a ride if there was no one else around.

          Move on OP… You don't want a house with this kind of juju around it now anyhows.

    • Lastchancetosee on 21/01/2020 - 09:00
      +1

      This. You could have made no further open inspections a condition of your offer.

      The seller still had obligations to his agent, so the agent would get his cut, irrespective.

    • HighAndDry on 21/01/2020 - 08:29
      +4

      Fight and lose. On the bright side, it'd be a short fight.

      • CheapskateQueen on 21/01/2020 - 14:01

        the argument would fall on equity law. not saying it's one worth taking

        • HighAndDry on 21/01/2020 - 14:13

          Maybe an estoppel argument? That'd drag it out a few minutes while OP's lawyer presents it, the judge chuckles to themselves quietly, and then also summarily dismisses it…

  • whooah1979 on 20/01/2020 - 20:50
    +1

    Next time get it signed on the spot. Use a napkin if you have to.

  • spackbace on 20/01/2020 - 21:20
    +4

    Play stupid games, win stupid prizes. Offer too low, you risk the chance that someone can offer higher. Hell, they could've used your offer as a bargaining tool.

    • Archi on 21/01/2020 - 09:18
      +2

      probably did and had email to prove it

  • [Deactivated] on 20/01/2020 - 21:42
    +1

    No deposit, no contract.

    • ihbh on 20/01/2020 - 22:05
      +4

      To be more precise… no exchange of contracts, can be gazumped.

      Holding deposit not equal to contract.

      • [Deactivated] on 20/01/2020 - 22:14
        +3

        There will be at least some form of a contract for there to be a deposit.

        Giving someone money without a contract is not a deposit. It's just giving someone money.

  • DrRalph on 20/01/2020 - 21:44
    +2

    Is this a problem question for a law course?

  • Seraphin7 on 20/01/2020 - 21:44
    +1

    What advice would you give to deal with the current situation?

    Write old mate a "strongly worded email" … and then get on with your life! There was no binding contract here so unless you can get in with a better offer before the vendor executes a contract you're up the proverbial without a paddle.

    • Meerkatsrok on 21/01/2020 - 08:56
      +2

      "strongly worded email"

      in bold AND all caps?

      • Seraphin7 on 21/01/2020 - 09:01
        +2

        Ooh, careful … that sounds a bit stiff.

      • tessel on 22/01/2020 - 07:03
        +2

        With punctuation, just to notch it up a level.

  • RockyRaccoon on 20/01/2020 - 21:49
    +7

    You also tried to screw the Agent out of his commission, so he probably worked hard to stop you getting the sale. So you were happy to screw him, now Karma doesn’t give you much love.

    • jackspratt on 21/01/2020 - 14:20
      +3

      The buyer has no legal relationship with the agent, and owes them nothing.

  • garetz on 20/01/2020 - 22:03
    -8

    If you have it in writing, ie the email that he accepted your offer you have legal recourse, talk to a solicitor.

    • ribbonsofnight on 21/01/2020 - 01:32
      +1

      Yeah, because there aren't enough parasites bleeding people dry in real estate already.

  • Almost Banned on 20/01/2020 - 22:22
    +1

    Its a contract for the sale of land so certain formalities need to be satisfied.
    You have it in writing - so that's one good thing.
    Do you have a concluded agreement? Well, that will depend on how certain your agreement was.
    There are lots of cases on this issue and it can be hard to pick exactly which way it will fall without knowing every detail.
    You need to find a good solicitor to give you some advice. Losing out on a contract for sale of land may well involve enough damages to warrant legal action.

  • netjock on 20/01/2020 - 22:36
    -1

    I feel for you but with 99.9999% of real estate agents I can be 100% sure they are not telling the truth. I had one try to tell me, just settle for half the value of what is broken because you can get one for x price. Well that one doesn't fit into the exact gap does it? It is twice as big. Even the vision impaired could see that.

  • Donaldhump on 20/01/2020 - 23:08
    +4

    Just business you would do the same

    Happens in the world of love too, ever started dating someone and then they disappear. They obviously met someone better and looked after themselves…

    Move on find a better house, and if it helps drive by the house and flick dog poo at it

    • Gelato on 21/01/2020 - 00:09

      ouch but it’s a good analogy

  • tsunamisurfer on 20/01/2020 - 23:17

    There is nothing wrong with cutting out the Agent so you guys can negotiate with some of that freed up money but as soon as you reach an agreement, go and do the paper work.

    If the Seller does nto want to do the paperwor immediately, he is using you as leverage.

    • Donaldhump on 21/01/2020 - 00:35
      +1

      If agent exclusive they get commission regardless I believe, depends if exclusive

      • HelpMeiCantSee on 21/01/2020 - 15:58
        -1

        Every agent will have you sign an exclusivity clause. We are talking big bickies for not a whole lot of work, of course they’ll protect themselves!!

  • HighAndDry on 21/01/2020 - 08:26
    +1

    What advice would you give to deal with the current situation?

    Move on.

  • jacross on 21/01/2020 - 08:56
    +1

    Putting aside the specifics if real estate law as it relates to contracts for sale, your email correspondence would be considered an invitation to treat. The 'paperwork' mentioned would represent the formal offer and acceptance.

    Real estate law has a bunch of specific hoops and terms that further undermine your position.

    They clearly realised that they can't cut out their agent and they got a better offer. It's called gazumping and there's no recourse against it.

    You could run all of this by your solicitor though and they will provide you with formal legal advice.

    • whooah1979 on 21/01/2020 - 09:50

      .2. swindle (someone).

      • jacross on 22/01/2020 - 06:36

        Pardon?

        • TerryJustTerry on 22/01/2020 - 08:39

          I think he is trying to say gazumping is basically swindling (someone)

  • Drj55 on 21/01/2020 - 09:06

    Bum thing for vendor to do. But that's why we use contracts and deposits and you have neither.

    • HighAndDry on 21/01/2020 - 10:24
      +1

      Eh. OP wanted to pay less by cutting out the agent. Karma really.

  • Porker on 21/01/2020 - 09:57

    Losing out on a sale you thought was in the bag is not a good feeling. Move on and in this situation, the best advice given to me was '.. the perfect house comes along once a month..'

    Just learn from this experience to avoid missing out on the next.

  • OzHunterNSW on 21/01/2020 - 10:07

    Too many chefs in the kitchen… eat what was served

  • Dotheday on 21/01/2020 - 10:18

    You sound as dodgy as the seller

  • pebee47 on 21/01/2020 - 12:42

    First off, the seller has signed an agreement with an agent to be the exclusive marketer of the property for a certain period of time. The seller agrees to pay the Agent a commission if any person buys it during this period (or even if they wait till after the Agency period and make an offer to buy within a certain period after the end of the agency agreement). It doesn’t make any difference if the offer is made direct to the seller or through the agent or any other person.
    Second, for a contract to be viable there has to be a SIGNED Offer to buy, including the legal description of the property, the total $ amount, the date the contract will be executed and a consideration (deposit amount) paid immediately. This is still the Offer to Buy. If the Seller agrees to the details of the Offer they sign the acceptance clause and then INFORM THE BUYER THEY HAVE ACCEPTED THE OFFER.
    When this final step is completed, there comes into being a legally binding contract. It appears that in this case no such legal contract exists.

    • Hybroid on 21/01/2020 - 12:54

      First off, the seller has signed an agreement with an agent to be the exclusive marketer of the property for a certain period of time.

      Not necessarily. You can agree non-exclusive terms and advertise multiple places/agents, although likely higher commission rates if they sell it for you.

      If the Seller agrees to the details of the Offer they sign the acceptance clause and then INFORM THE BUYER THEY HAVE ACCEPTED THE OFFER. When this final step is completed, there comes into being a legally binding contract.

      Not true, even after exchange of contract, either party can still back down and change their minds. It's only legally binding on completion/settlement day.

    • HeWhoKnows on 21/01/2020 - 14:44

      Why not just cut to the bone and tell OP "an email is not a signed contract".

      • Almost Banned on 21/01/2020 - 17:04

        Because that is not legally correct?

  • HeWhoKnows on 21/01/2020 - 14:41

    Sue the seller
    Sue the agent
    No sue OP for causing such a rukkus over a couple of emails !

    OMG When will people learn?
    Email is just a written discussion and nothing more.

    Go back to GO dear OP and start all over again
    Do not collect $200
    All you were doing is playing Monopoly mate

    And please dont cry along the way

  • minniethemoocher on 21/01/2020 - 15:53

    As others have said there was no contract and no deposit was paid. You both had the opportunity to walk away. Say for example you had found a better deal before the 20 January on another house you could have walked away. The seller would have had no recourse, it’s not like he could held you to the contract.

  • payless69 on 22/01/2020 - 08:58

    popcorn

  • Mysterious Laptop on 22/01/2020 - 09:49
    +3

    Is it me or are the questions on these forums becoming more and more ridiculous??

    • Baysew on 22/01/2020 - 09:58
      +1

      It's just the new normal.

    • itbargainhunter on 22/01/2020 - 11:08
      +2

      I am afraid commonsense is the new superpower these days.

  • techlead on 22/01/2020 - 10:11

    Just move on and learn from the experience for next time. Until you sign on the dotted line and pay the deposit, you've got nothing. No binding contract.

  • godofpizza on 22/01/2020 - 10:25

    OP, when did you find out about the open inspection on the saturday?
    I am surprised the REA didn't call you directly about accepting your offer and arrange a time to sign off on paperwork.

  • Gumster on 22/01/2020 - 10:26

    Yeah Under offer is under offer,
    Realtors are still advertising for better offers until you get finance approved and you sign all the paperwork.

  • trapper on 22/01/2020 - 11:19

    The better offer is the better offer, why would the seller turn down thousands of dollars extra from this new buyer.

    If you still really want this house then maybe make an offer to match or beat.

  • Waffles on 22/01/2020 - 11:46

    I've even had contracts with the statement below, basically JUST IN CASE somehow another agent tries to be involved and claim a commission the seller makes it the purchaser's problem with this.

    The REAs totally have an agreement with the purchaser that is "if I market it for you, I get commission" doesn't matter who ends up buying, they wouldn't care if it's your own family.

    "The Purchaser was not introduced to the property or the Vendor by any real estate agent or other
    person entitled to claim commission as a result of this sale (other than the Vendor’s agent, if any,
    specified in this contract). The Purchaser will indemnify the Vendor against any claim for commission
    by any real estate agent or other person arising out of an introduction of the Purchaser and against
    all claims and expenses for the defence and determination of such a claim made against the Vendor.
    This right continues after completion."

    Sucks to get gazumped. On the plus side an owner being dodgey enough to try and go behind the vendor probably didn't put as much love into the property as it may appear.

  • Bills22 on 22/01/2020 - 13:06

    Move on, who cares. Plenty of them out there. Don't do a FOMO.

  • Trying2SaveABuck on 22/01/2020 - 15:09

    Offer more money it is your only option

  • McMoots on 22/01/2020 - 15:56

    Of course this happens in Perth, lol.

  • [Deactivated] on 22/01/2020 - 17:12

    Normal thing to happen really. Expect this everytime.

  • Kranbone on 22/01/2020 - 19:11
    +2

    This sucks but it does happen. If you really feel hard done by I'd approach a lawyer who can better advise you.

    Who knows, maybe the email does constitute an agreement but even then, you may be able to use it to gain money towards another house.

    Part of me is saying the owner was having a 2 way bet to get the highest price (ie, betting with you early in, but also seeing if anyone at the inspection would offer higher).

  • ankor on 22/01/2020 - 20:22

    Why bother dealing with such a shady pos.
    I'd move on.

  • [Deactivated] on 24/01/2020 - 12:20

    You snooze you lose!

  • HeWhoKnows on 26/01/2020 - 13:42

    When OP offers something for sale on facebook or Gumtree and the person makes an offer but doesnt turn up does OP take legal action against them?????????????

  • tallkid123 on 28/01/2020 - 14:19

    You need to exchange contracts ASAP next time.

  • Moderatorhamza23 on 04/02/2020 - 13:34

    OP has received the answers they were after, comments are closed.

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