Profile picture for bdbaron

Seller and I had a verbal agreement and at the last minute sends a different offer

I had made an offer on a house in Henderson, NV. I was willing to pay the sellers asking price and we had a signed contract. But my mortgage broker threw a monkey wrench in the works after telling me that I was qualified, came back and said they couldn't use a large portion of my income (for reasons that are convoluted and not worth going into here).  So to keep the deal on the house going I offer a lease/purchase option for 6 months, here's where the bad faith on the seller begins, after submitting the offer we get a call from the seller's agent that they agree to the offer with one stipulation... that I pay the price we agreed upon at the start of the deal, at first I wanted to limit the value decrease but otherwise agreed.  I had an appraisal done on the house to make sure that the value was what it needed to be at the start.  I get the appraisal back, it's $1000 less that the agreed price, I was still going to go ahead but on Wednesday, 2 days before the date we had set in the lease  proposal, the seller's disappear on a camping trip.  They (through their agent) don't communicate until Tuesday morning (a week from the time they went camping) but it wasn't until after business hours on Tuesday that I got the unrecognizable counter offer. It turns out their camping trip was nothing more than a stall tactic and a consultation with a lawyer friend. All the numbers changed, all higher and in the sellers favor but that wasn't the worst of it, because I was going to accept the new numbers because overall after doing the math it was not much more than if I had to pay rent for those 6 months.... the kicker was that the seller "DEMANDED" the release of the EMD in escrow!  That was the one thing I couldn't agree with because they were already playing games, I needed an insurance policy to keep them somewhat honest.
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November 22 2010 - Green Valley South
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Profile picture for bdbaron
The rest of my topic.....

They wouldn't budge and I gave in enough.  I called off the deal but all along my feeling was that they were doing this because they wanted me out of the deal and that was proven by the fact the house sold less than a week after I shutdown my deal with them.  The other thing is before I made my offer the house sat on the market for 3 months. I wouldn't be surprised if the sale went to the lawyer that advised them on the outrageous terms of my deal.

Also before I made my offer the house sat on the market for 3 months. I wouldn't be surprised if the sale went to the lawyer that advised them on the outrageous terms of my deal.

No one in their right mind would have given the seller the escrow funds before the actual sale of the house (if I couldn't complete the deal, they got the money anyway) and a seller wouldn't want to risk losing a deal if there wasn't another deal to back it up.

I guess, my question is what recourse do I have, if any?
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November 22 2010
I am not an attorney and this should not be construed as legal advice.

Based on the info provided it sounds like you have no recourse. You had a signed agreement that you could not complete at no fault to the Seller.  You offered a deal to them which carries much higher risk and they accepted verbally, but after thinking about it, the Seller decided that the risk was worth more then you were willing to offer.  It sounds to me like the Seller got a better offer that made sense.  Seller is not obligated to sell to you just because.

What are EMD funds?  Not familiar with that acronym.  As a Seller in Lease Option to Purchase situations I require a non-refundable donwpayment from the Buyer.  The risk is to the Seller in a Lease Option to Purchase situation because the Buyer occupies the home and could cause damage far beyond any security deposit (if no non-refundable downpayment), also a non-refundable downpayment encourages the Buyer to close the deal.  If there is no money in the pot then the Seller holds all the risk should the market continue to decline and has taken the property off the market for those 6 months.
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November 22 2010
Profile picture for wetdawgs
  Lease option to purchase tend to be lousy deals, for the buyer as well as seller, and only a tiny percentage actually come to closure.   Therefore, you should be happy to get an out.   Most lease options I've heard of require a substantial non-refundable down payment plus only credit towards the purchase is the value above and beyond market rent. 

It is the rare seller when given a choice between a lease option and a true sale who will chose the lease option.

In your words, I see no recourse, but advise if you think you wish to go that direction that you consult with a lawyer.   they did the right thing to consult with a lawyer.
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November 22 2010
 EMD funds (Earnest Money Deposit) @ Caleb Yamanaka, "CHUTTA"

Lease options are not for the faint of heart. They require years of knowledge in real estate, or hours of schooling by a good lawyer that will cost more than most deals are worth, lots of patience and many strands of grey hair. 
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November 22 2010
I'm going to back up what is above. Your written contract failed, through no fault of the seller. Any new agreement would basically be a completely new contract to sell the home, and until it is in writing, it is unenforceable.
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November 22 2010
It sounds like you may have no recourse - but as most others have mentioned, you should consult an attorney that specializes in these types of contracts (specifically in your location/area).
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November 22 2010
 
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