Question #1:
I sold property with a specific date for the closing to occur. It did not occur. Is is okay to declare the contract null and void and re-list the property?
Answer: Probably not. Generally, courts will not strictly enforce the time deadlines that are contained in contracts. The time deadline is read by a court to be a reasonable time to perform. A date alone or even a date with a "time is of the essence" statement is not enough to strictly enforce the date in the purchase contract. This is particularly true if "time is of the essence" language is contained in the preprinted language in the form. Although there is not any way to be certain a court will strictly enforce a time deadline, a court is more likely to do so if there is a stated reason in the contract why time is crucial for this particular transaction. For a more thorough discussion of this issue, see Greg McClelland's Legal Lines column in the
January 2000 issue of the Michigan REALTOR® magazine.
Question #2:
I sold a home with a purchase agreement that allows for an inspection. What should the buyers do after the inspection has found some problems?
Answer: The buyers' rights will depend on the wording of the inspection contingency clause. Generally, buyers have many options after the inspection. They can offer an addendum to the purchase agreement to have the seller fix the problems or reduce the purchase price. (Typically, the presentation of a proposed addendum does not alter the original purchase agreement and if the proposed addendum is rejected, the original purchase agreement is still binding.) They can exercise the contingency and notify the seller in writing that the purchase agreement is null and void. Or, they can choose to complete the purchase under the terms of the contract.
Question #3:
If the sellers never lived in the property is it exempt from the Seller's Disclosure Act?
Answer: No. The sellers must fill out the Seller's Disclosure Form even if they have never resided in the property. In the case of nonresident sellers, many of the items may be marked unknown or not applicable. Sellers who do not reside at the property should also indicate that fact in the explanation section.
Question #4:
Are sellers obligated to accept a full price and terms offer in response to an offer in an MLS?
Answer: No. The Michigan Court of Appeals recently held that an MLS listing does not constitute an offer which can be accepted. Thus, even if buyers come in with a full price and terms offer with no contingencies, the seller is under no obligation to accept the buyers' offer. The seller may owe a commission, but has no obligation to enter into a purchase agreement and sell the property.
Question #5:
Can a listing agreement be canceled before it expires and if so how?
Answer: Yes. You cannot continue to act as the agent of the sellers when they have specifically stated that they no longer wish you to do so. However, this may not end your involvement with the sellers. If a sale is pending, in most instances you have earned the commission and are entitled to it. If there is not a sale pending, Michigan courts typically have held that sellers have not breached their contract by terminating it early, unless done in bad faith simply to avoid paying a commission.