The high price of seller's remorse

DEAR BENNY: We just received an offer on our home. It is a cash buyer with a 30-day closing and seven days for inspections. My wife and I waited until we had a good offer to look for a new home. We now feel like we made a big mistake and would like to get out of our contract. Is this possible? My wife has been ill and the idea of moving is making her feel worse. --Michael

DEAR MICHAEL: Getting out of a signed legal document is not easy. You have "seller's remorse," but you have a binding contract with your potential buyer.

When a buyer defaults on a real estate contract, the seller generally has three options. He can (1) keep the earnest money deposit, (2) sue the buyer for damages, or (3) sue for specific performance. When I represent buyers, I generally limit their liability -- their exposure -- to the loss of the deposit.

When I represent sellers, I urge them to get a large deposit just in case the buyer defaults. Litigation is always time-consuming, expensive and uncertain, so keeping the deposit usually is in the best interests of the seller.

When a seller defaults, the buyer has the same three remedies. If my buyer client is willing to file suit, I often file for specific performance. That puts a cloud on the seller's title and the house cannot be sold until the lawsuit is resolved. And typically, a seller has received a better offer and that's the reason for the "default."

But your case is different. You made a mistake and now want to stay in your home. I suggest you contact the buyer directly and avoid using the real estate agents as an intermediary. (Of course, if the buyer does not want to talk with you, you will have to go through the agents.)

The buyer may be sympathetic. But the buyer may also be upset that he has lost a good bargain, and you may have to pay the buyer some money to get out from under the contract.

There also may be some loopholes in your sales contract. I suggest you contact a real estate attorney in your area who may be able to provide you with specific guidance.

DEAR BENNY: I am an 80-year-old woman who lives in a townhouse community with 78 units. We pay $75 a month in homeowners association fees, which is up from $60 and poised to go higher.

Our board officers decided they should be paid a monthly fee. There are four other complexes that pay only $60 a month and their officers do not get paid. The president is awarded gift certificates from the board for anything she does. In all of my life I have yet to hear of a volunteer given a salary. Have times changed that much? --Jane

DEAR JANE: No, times have not changed; greed and incompetence have been with us for a long time. The issue of whether board members should get paid is a hot one around the country. Board members complain that they work hard for no pay.

But, typically your state law (or your legal documents) will have a prohibition against board members receiving compensation for their services. They can be reimbursed for legitimate expenses they may incur, but if the bylaws prohibit such payment, the board cannot unilaterally vote to amend the bylaws.

It usually takes a super-majority vote (66 2/3 percent or even 75 percent) of all the owners to amend the legal documents. And from what you have advised me, no such bylaw amendment was ever presented to the owners.

But even if the bylaws are silent, I don't believe a board has the right to vote to pay themselves without getting approval from the owners. After all, they ran for office knowing that they would not get paid, and the members have the right to rely on their vote. More importantly, it's your money they spend -- not their own.

I am, of course, sympathetic to the concerns of those board members who do put in long hours on behalf of the association. But they are serving to protect the interests of all unit owners -- not just to get a paycheck. I don't think that board members should get paid. ...CONTINUED

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