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Buyer striking part of the standard contract. Is this a scam?

1,635 Views | 15 Replies | Last: 6 mo ago by Win At Life
Cardiag
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AG
We have a cash offer but the buyer struck the following from the standard contract:

If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract

Anyone know if this is some kind of move to screw us down the road or does it just have to do with the cash offer?
Agilaw13
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They are tying your property up, however, what are you going to do if the Buyer doesn't show up to closing/doesn't follow through with the purchase? Many times the specific performance clause is deleted to keep any default claims out of litigation resulting in the forfeiture of earnest money being the default remedy.

Not sure if the Buyer knows what they really did in this situation or if it's intentional. Doesn't feel right. They might even be trying to flip/assign the contract without any skin in the game.
Martin Q. Blank
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Strike the part about the seller defaulting.
Cardiag
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AG
You think they could be trying to pose as an individual and then reassign the contract to developer?
Cardiag
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AG
Update for those interested.

Buyer's dad is a big time real estate attorney. Apparently its not uncommon for attorneys to strike that paragraph since it is effectively redundant somehow.
Diggity
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AG
They can strike out specific performance (as it's fairly useless anyway) but they shouldn't strike out the second part. That would take away any remedy for you if they defualt.
Red Pear Realty
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AG
If he's a big time real estate attorney why isn't he using his own contract docs instead of marking up TREC promulgated form contracts?
Sponsor Message: Up to 2% Buyers Commission Rebates / $1,200 Full Service For Sale Listings / $500 For Lease Listings with Red Pear Realty. Also, contributor at Houstoning.
Agilaw13
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Cardiag: Attorneys regularly use the standard TREC forms for standard residential transactions (not so for commercial transactions). The TREC form is also the document that most brokers and realtors are familiar with and use as they can't create legal documents.

I disagree that it is standard to strike through both (a) and (b) of Section 15 (Buyer's Default). A real estate attorney may advise to strike provision (a) to limit default remedy to earnest money only.

The Buyer probably wouldn't be too happy with you striking 15 (a) (Seller's Default) and limiting them to getting earnest money back (no damages).
HomeFinderCody
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AG
Agree with a few above: strike specific performance, but not the EM part...
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Jay@AgsReward.com
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AG
Cardiag said:

Update for those interested.

Buyer's dad is a big time real estate attorney. Apparently its not uncommon for attorneys to strike that paragraph since it is effectively redundant somehow.
Oh boy, this will be a fun transaction for you!
gig em 02
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Red Pear Realty said:

If he's a big time real estate attorney why isn't he using his own contract docs instead of marking up TREC promulgated form contracts?


Because his docs are probably much longer and far more complex than what is needed in this situation and would result in months of back and forth negotiations and thousands of dollars in legal fees for the seller.

"It's better to remain silent than to inform everyone that you have no idea what a complex real estate transaction looks like."
- Abraham Lincoln
HTownAg98
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You're going to need to cite that quote.
CS78
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I really hate when the other side gets an outside attorney involved. They always feel obligated to screw with something that doesn't need screwing with.

If it were me, I'd accept if they brought $500 in option money.
Red Pear Realty
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AG
gig em 02 said:

Red Pear Realty said:

If he's a big time real estate attorney why isn't he using his own contract docs instead of marking up TREC promulgated form contracts?


Because his docs are probably much longer and far more complex than what is needed in this situation and would result in months of back and forth negotiations and thousands of dollars in legal fees for the seller.

"It's better to remain silent than to inform everyone that you have no idea what a complex real estate transaction looks like."
- Abraham Lincoln
Sponsor Message: Up to 2% Buyers Commission Rebates / $1,200 Full Service For Sale Listings / $500 For Lease Listings with Red Pear Realty. Also, contributor at Houstoning.
mazag08
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AG
gig em 02 said:

Red Pear Realty said:

If he's a big time real estate attorney why isn't he using his own contract docs instead of marking up TREC promulgated form contracts?


Because his docs are probably much longer and far more complex than what is needed in this situation and would result in months of back and forth negotiations and thousands of dollars in legal fees for the seller.

"It's better to remain silent than to inform everyone that you have no idea what a complex real estate transaction looks like."
- Abraham Lincoln
You do know Red Pear is not his only business correct. Do you know what his other one is? Hint.. it's in commercial real estate.
Win At Life
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AG
This reminds me of a comment I heard at Enron about their lawyers' ridiculous contracts.

"I wouldn't want to do business with anyone incompetent enough to sign our T's & C's."
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