Question: I am a Realtor in New York and I recently received an offer for one of my listings that involves a seller's concession for closing costs. The bank has done an appraisal before contract and it will appraise for exactly the amount offered plus the seller's concession. Is this a risky situation for the seller? If the buyer were to walk away from the transaction isn't there really no down payment or earnest money other than the bank's?

Answer: Yes, this could be a risky situation for the seller. However, if either the buyer or the seller breached the contract to purchase, there would be no real estate transaction, no loan from the bank, and therefore no "down payment." If there were a deposit or earnest money required by the contract terms, that would make more sense to me as buyers and sellers often disagree about who receives earnest money in the event of default. However, as prices in the local market escalate and/or buyers wish to conserve out of pocket costs, we believe you will encounter more situations in which a buyer asks for seller-side concessions. In the Houston market, for example, approximately 1/3 of the residential real estate transactions involve some form of seller-side concessions.

As the listing agent, you are well aware of the fiduciary duties you owe the seller. For example, the New York State Disclosure Regarding Real Estate Agency Relationships states: "A seller's agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and a duty to account. The obligations of a seller's agent are also subject to any specific provisions set forth in an agreement between the agent and the seller."

From the standpoint of dealing with sellers, the key is to make sure the seller has the necessary information to make his or her decision based upon "informed consent," and that this information is delivered to the seller in a fashion consistent with the fiduciary duty of undivided loyalty (e.g. The real estate licensee places no interest, including the licensee's own interest, ahead of the client's interest).

Therefore, the seller assumes the position wherein the seller has the necessary information to assess the risks involved in accepting such an offer from a buyer. The counter-offer, if any, can serve to mitigate such increased risks by requiring fewer (if any) seller-side concessions, extended closing dates subject to the lender's approval of the buyer, and so on. Or, the counter-offer might also refuse to accept any seller-side concessions. The main point is that ultimately it is the seller's decision based upon the numerous variables that comprise the decision matrix of each seller.

Question: The California Realtor who represented the buyers of my home provided a document stating his clients were pre-approved. My husband and I sat down with our Realtor who presented 4 offering packages and specifically because the package stated these buyers were pre-approved, my husband and I chose to sell our home to these people. Initially, our entire buy and sell process was "contingent" on the sale of our home in California so that we could use the equity as a down payment.

The sellers of the home we chose to buy -- also in California, gave specific instructions that they wanted a quick close of approximately 3 weeks. Due to the fact that the buyers' Realtor provided a document stating his clients were pre-approved, we signed an agreement with the sellers of our new home. Close of escrow did not happen and therefore our Realtor scrambled to find a private investor and the purchase of our new home went okay. However, we are still in escrow on the sale of our old home which should have closed two months ago.

The obstacles encountered by the buyers of our home were:

1. They were not pre-approval as stated by their Realtor;

2. They did not have enough trade lines;

3. They were previous renters and they could not find the correct person to whom they sent payments as verification; and,

4. They had Immigration issues.

All the above facts were concealed by the buyers' Realtor and more importantly, the buyers' Realtor fraudulently misrepresented these important facts to us. Due to the buyers' Realtor's unethical actions, I am compelled to file a lawsuit against the Realtor as my family has endured emotional and financial distress. I become physically sick to my stomach when I think of all that my family has gone through. The proceeds from the sale of our home were intended to be used for purchasing new furniture in our new home. We have been in our new home more than two months and, to date, my 11 year old daughter is sleeping on a mattress on the floor.

I have been looking on the internet for any articles that are similar to my situation. I am seeking your advice concerning Realtor misrepresentation and how a consumer seeks justice. Do I have grounds for filing a lawsuit in Superior Court?

Answer: We are indeed sorry that you have had this bad experience in the sale and the purchase of your homes. We do however, have some suggestions for you and while recompense seldom assuages the bluntness of the trauma endured by you and your family, at least it is a pro-active action you can take to assure that those who are at fault do not get away with their heedless actions.

The broker may have misled you or the broker could have well been passing on information provided to the broker by an unscrupulous mortgage broker. The best advice on any purchase is that it's not over until it's over. Don't plan on the income from the sale of your home until it is in your hand.

We believe you may very well have a cause of legal action. However, we suggest that you hire an attorney experienced in this area of the law. If you do not have an attorney, access the public services section of the California State Bar Association .

You may also file a complaint against the Realtor and/or the lender, but be sure to check with your attorney before you do. Access the California Department of Real Estate's complaint page , and follow the instructions given. As for the lender, access the California Department of Corporations' complaint pages at and follow those instructions.

Question: My sister-in-law put a contract on a house in Kentucky recently with a $500.00 good faith deposit. All terms were accepted by the seller except he wanted her to give them a $1000.00 good faith deposit and he would throw in the washer and dryer. The next day she had an appointment with her Realtor to look at the house again and then to submit the final offer. She decided that since she did not need the washer and dryer she would keep her good faith deposit at the $500.00 as originally given. Her agent gave the sellers 2 hours to respond. The seller's agent stated that they denied her offer because the agent had shown the property earlier that day and those people had made a better offer. He also stated she could have had the house the night before had she just given the extra $500.00 deposit as the seller had requested. I have never heard of anyone losing a home over their good faith deposit. Is this common practice?

Answer: A Seller in a real estate transaction has the right to require anything the seller wants, provided it complies with applicable local, state and federal laws. It is not at all unusual for a seller to require a good faith deposit (also called "earnest money"). The fact that another buyer came along who was willing to increase the deposit to $1,000 as opposed to your sister-in-law's offer, to which the seller had not agreed, is not unusual. Unless the seller actually signs the contract, all you have is an offer. Verbal (meaning "spoken") representations by the seller or the seller's agent, or by you or your agent, have no force or effect as to real estate transactions. Kentucky is like most other states, in that the Statute of Frauds requires any real estate transaction (unless it is a lease agreement for 1 year or less) to be in writing.

Question: My Georgia home is in a subdivision that is off a county road. It is currently a two-lane road but there have been public meetings from the county and discussion during homeowners meetings that the county is going to expand the road from 2 lanes to 4 lanes. That entails the county acquiring portions of homeowners' properties. Individual homeowners have not been approached by the county to date. My question is if one is to list their home, does this info have to be disclosed?

Answer: If you have to ask, then disclose it. Put yourself in a purchaser's shoes. Is the disclosure of this information something that a reasonable, prudent buyer would want to know before purchasing your property? Asking yourself this question and then, provided your answer is "yes," disclosing it to the prospective purchaser, makes for sounder sleeping at nights after you've completed the sale of your property. Alternatively, not disclosing what many folks would construe to be a material fact regarding your property can result in many sleepless nights, a law suit, and the potential of court-ordered civil penalties up to the complete rescission of the sale.

However, make sure you know whatever you disclose is a "fact." For example, disclosing that the county is going to expand the road from 2 to 4 lanes would not, at this point, be an accurate disclosure.

Disclosing that there have been public meetings and a homeowner's association meeting in which there was discussion regarding plans the county has for expanding the 2-lane road to a 4-lane road that would require the county to acquire portions of homeowners' properties, would be an accurate disclosure because it is an actual fact as you, the homeowner, understand it.