What To Do When You Think The Sellers Are Discriminating Against Your Buyers
The issue of fair housing comes up during the course of negotiation, but what do you do when the sellers try changing the deal 10 days after accepting it, and you think it’s due to discrimination?
I had a Power Agent® come to me with a situation recently. He was representing the buyer, and just had a deal accepted by the seller with a down payment of $25,000 and a mortgage contingency, similar to most offers that are made. Then, the listing agent comes back and changes the deal, telling him that the down payment needs to be 10% of the purchase price and remove the mortgage contingency, making it more difficult for my buyers to purchase that home. He believed it was potentially a violation of the Fair Housing Act because the seller accepted the deal already, and is now pushing the buyers out after 10 days.
TIP: Check out this related article: “The Negotiation Dance: Why Partnering with the Other Agent is in Everyone’s Best Interests.”
This is how the MLS works: the listing agent says, “If you bring me a buyer who’s ready, willing, and able, I will pay you $X amount out of my selling brokers commission.” Legally speaking, you have already earned your commission because the seller accepted the deal and signed. If the listing agent is coming back and trying to change the contract, you can say to them, “If your seller is changing the deal, I still have already earned my fee. I suggest that you tell your homeowner to sign the contract, otherwise I’m going to have to sue you for the commission owed to me.”
The second thing you can do, particularly if you think this is a fair housing violation, then you should tell the homeowner and the listing agent that from this point on, they had better not sell this house to any other person without a mortgage contingency, otherwise your buyer is going to sue them for fair housing discrimination and put a lien against the property, which means they won’t be able to close with any buyer that they sell to. This should scare them straight!
TIP: This article by Clever discusses the legal ways that a seller or buyer can get out of a contract, once signed.
The seller already accepted the terms of the deal, so now, if your buyers are forced to back out of the deal, if they try to sell the property under the terms that your buyers originally offered like allowing the mortgage contingency, you would have proof that the homeowners discriminated against your buyers.
The Value of a Great Attorney
It would also be prudent to hire an attorney, and have the attorney write a letter to the listing agent and homeowner, and yes, it will cost some money, but when people see a letter with the Attorney’s letterhead, it gets a more serious reaction than if you send a letter yourself.
If you don’t already have a lawyer that you have worked with and trust, talk to your broker for a recommendation.
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