I
remember from real estate
school that if someone signs a contract under duress, the contract is
invalid,
but what is duress? Duress, to me, is someone holding a
gun to your
head and
saying sign or die. But, there are, of course, lesser meanings to it.
So, how does this come
into play in real estate today? Let us look at
someone
in a short sale situation who has lost their job. They have two banks,
the
first is getting all their money and the 2nd is
taking a huge hit or
getting absolutely nothing. If they make the seller sign a contract to
pay back
the money, or they won’t agree to the short sale, is this a form of
duress? Is
the contract valid?
Todd Clark - Broker / Sales Coach
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739
©2009 Todd Clark - Real Estate 101: A contract signed under duress isn’t valid, but what is duress?
Todd Clark and the Friendly Home Team
Knipe Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)622-8739
I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard.
All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.
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Todd
You just keep those ethics haning high.
According to the real estate dictionary...Duress is considered: A situation where a person is forced to enter into a contractual relationship against his will by the threat of imprisonment either to himself or his family, or the threat of actual physical force...I think your example may be a form of intense stress brought on by the possibility of losing a home...
Todd --- As Wanda said, your example is definitely intense stress if not duress.
I would love to hear the argument in court. I'm guessing today the jury would be sympathetic to the seller.
Todd,
According to my Corel Word Perfect 12 built in dictionary: duress >noun threats or violence used to coerce a person into doing something: confessions extracted under duress. -ORIGIN originally in the sense 'harshness, cruel treatment': from Latin durus 'hard'.
"someone signs a contract under duress, the contract is invalid, but what is duress?"
That would make many if not most of today's offers invalid. For certainty if the seller bought in the last two or three years, today's realty is both harsh and curl!
Duress properly applied is a great motivator!
In my book "One House At A Time / Finding And Buying Single Family Rentals" I tell the true story of an offer one of my students and I presented one night, at 10 PM I asked the closing question no one spoke until 5 AM when the wife shouted at her husband to sign the offer. Now that's duress! We closed just before the sheriff's sale on the subject and their current home saving both.
Bill
Todd, like the others before and you yourself said to the client, it isn't duress, but what impressed me is you agreed to show your client others opinions and even was able to more establish yourself as an expert by using your blog. I'm betting in the end they will pass your information on to many other sellers telling them "Todd knows what he is doing!"
Hi Todd!
It is an interesting question, but I would tend to agree with my fellow Rainers...it is a tremendous amount of stress, but there are options, ugly as they might be.
Todd - I don't think you will be voiding the contract on this one. Great rhetorical question, but realistically, if there was enough money in the program to fund a lawsuit they wouldn't be selling short. Also, there are options that will not result in physical harm, i.e.- foreclosure, bankruptcy, etc.
Why wouldn't you advise your client to consult an attorney as this is a legal question.
Duress is defined as unlawful pressure. The foreclosure process is not unlawful.
Well, everyone after I had him talk to a lawyer and read your advice he decided that those late night infomercials that wanted his $995.00 to help them avoid foreclosure were a scam.