Do We Have Recourse if We Put Down a Deposit to Buy a House, Which Was Then Sold to Someone Else?

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“We (the buyers) put a $5000 deposit and signed docs with a Hubbard Clause (sell our house first) on a house in RI. The broker representing the sellers, we find out later, never faxed the documents to them because they’re out of state. But an email from the broker says they agree to the deal.  A week later the seller’s broker says there’s a new offer on the house (no increase, same price).  Within 48 hrs, we decide to apply to get pre-approved for a mortgage (which we do) without selling our house first and we submit the offer.  The broker says too late, the sellers decided to go with the other offer. Do we have any re-course now? Were there any real estate laws not followed or broken?”

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

It’s difficult to tell from your description, but probably not.  The sellers, it appears, never agreed to your offer, so they have no legal obligation to you.  The sellers’ broker acted poorly in failing to transmit your offer to the sellers, but he’s not your agent so has no direct obligation to you.  He also acted poorly in telling you that the sellers had accepted your offer, but as you know contracts relating to real estate generally need to be in writing to be enforceable.

There are some subtle points that might be grounds for liability here.  There may, in your state, be some implied obligations on the part of the seller’s agent that he violated, or even enough of a written trail (via emails) that a purchase contract could be construed between you and the seller.

The question you need to ask is, how good a deal is this house for you?  Because if you’re really going to push it, you’re potentially looking at some possibly lengthy and expensive litigation.  Granted, that’s the same risk the other side is taking, but they’ve probably got the same risk no matter what they do at this point (since there’s another buyer who might sue, too).

The alternative is to chalk this one up to experience, ignore any legal rights you might have, and focus on the next, hopefully better, deal.  Whichever way you decide to go, good luck.

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Author: House Attorney

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