Answer
It is not clear which party broker represents. It appears that broker represents the second buyer and if that is the case, then broker has no voice in this conversation. Seller and listing broker must determine how to proceed.
If broker is the listing broker, then listing broker needs to discuss with seller the significance of first buyer's failure to include the PSA that first buyer accepted to satisfy the home sale contingency. Form 22B says that buyer "shall" provide a copy of the purchase agreement that satisfies the home sale contingency at the same time that buyer provides notice of satisfaction. The penalty for buyer's failure is not provided in the form, however. There is nothing in the form that says, for example, as a matter of contract, that buyer's failure to provide the PSA invalidates the notice or constitutes automatic default of the purchase agreement between seller and buyer or that seller has the automatic right to terminate the PSA based on buyer's failure. Any of those outcomes could be true and it could also be true that buyer's failure was immaterial because as soon as buyer broker learns of the failure, buyer broker immediately corrects the oversight and sends over the PSA.
If broker represents the seller then listing broker and seller should discuss how seller wants to proceed. Even if seller prefers the second buyer, seller is in contract with the first buyer and seller owes first buyer a duty of good faith in performance of the contract. The Hotline lawyer cannot advise seller as to what seller must do in this situation and neither can listing broker. Seller could instruct listing broker to contact buyer broker and ask for a copy of the PSA that should have been provided with buyer's notice. If buyer immediately provides the PSA, that action will likely cure any defect in buyer's original failure. Or, at the opposite end of the spectrum, seller could take the position that buyer's failure to include the PSA with buyer's notice of satisfaction is fatal to buyer's contractual right to purchase and that buyer's purchase agreement with seller terminated based on buyer's failure to properly deliver notice of satisfaction. If seller takes that position, seller should recognize that first buyer may now be homeless because first buyer is in a binding sale of buyer's home and buyer has no contract to purchase seller's home. That outcome could create desperation and desperation can lead to difficult outcomes.
Might the buyer seek legal counsel? Might the buyer's lawyer advise that seller violated seller's duty of good faith by failing to ask for a copy of the PSA? Might buyer's lawyer argue that buyer's breach of failing to include the PSA was immaterial because buyer could have sent the PSA immediately upon notification of failure? Might buyer just ride off into the sunset and seller never hears from first buyer again? Yes. Any of these and many other options are possible. The fact is, there is no way of knowing what buyer will do in this situation and the possibilities can definitely create a high stakes outcome for seller.
Moreover, seller's range of options is not established in the agreed terms of contract. Rather, seller's options are based on choices available to seller and the best choice for this particular seller in this particular set of facts requires application of all the surrounding facts to Washington law under an analysis designed to predict the best outcome for seller. Hopefully, broker recognizes that process as the practice of law. If broker is the listing broker, broker should make clear to seller that there is not a single potential response in this situation. Broker should advise seller that there are a range of options available to seller and that if seller needs assistance in determining how seller wants to proceed, seller should seek the advice of seller's lawyer. Listing broker should then await seller's instruction and document listing firm's transaction folder with proof of these material communications.
|
