After a marathon day of golfing for charity, negotiating, driving, and executing documents, we finally have a deal!!!. In the end, I agreed to pick up my agent’s commission and also indemnify the seller against any claims or lawsuits coming from the real estate agent he didn’t sign on with, and he agreed to put a clause in the contract which allowed for reasonable extension of our closing date if circumstances beyond my control prevented closing by the official closing date of July 31st. This clause was very important to me as I waived my financing contingency and put $100,000 down in earnest money. If some shmoe at a bank fat-fingers a few keys and causes this thing to close on August 1st instead, I don’t want my earnest money to be at risk.
The indemnification thing is a bit of a calculated risk for me. Essentially, this other agent feels he should be compensated as the selling agent even though he was never retained by the seller. I have worked out a deal with my agent to pay this agent a .5%-of-selling-price referral fee out of his commission so everything should be good, but I understand why the seller would ask me to indemnify him. I don’t like having to do it and I don’t think any lawyer would advise anyone to ever do it, but I figure the chances are tiny that it becomes an issue, and even if it does, the amount we’re talking about is just 3% of the sales price. It’s not a trivial amount, but it’s not millions of dollars either. I will just have this other agent sign a release form before releasing his referral fee from escrow. Since both my agent and the real estate office that they both work for have confirmed to me that he has no claims to any commission, I’m not worried about it.
As for the deal itself, it was signed about an hour ago, at around 11pm and I’m still in shock that it came together. The seller and I both drove out to the real estate office, and as I was waiting for him to show up, I honestly thought that there was a chance he was going to take our signed offer and just sit on it over the weekend as the property went on the market. To his credit however, he read over the deal, faxed it immediately to his sibling that was the executor of the family trust, got it signed and faxed back, and congratulated me on being the new owner of their beloved home.
It’s such a great feeling to have made it through this process. By taking matters into my own hands and not allowing myself to be governed by the customs of the real estate industry, I have a once-in-a-lifetime house at a great price from a great family.
The stress isn’t over quite yet though. I have five business days to do the geotech inspection to make sure this house isn’t about to fall off the cliff and only a few weeks to close financing.