The listing agent said we were not in contract after the agreement was signed and agreed to. She said that she had a better offer and that we were not in contract. is this legal for her to do such a thing even though the contract was agreed to

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Patrick. If the contract was fully agreed and signed by all parties then you have a contract. You need to seek legal advice.
I agree with Bryant.
To add to Bryant's comment...was there $$ given with the contract?
Patrick,

I can only speak from my own experience (Oregon) although it would seem to me that if the contract was signed and agreed to the listing agent needs to present your clients offer to the lender. A home can only be sold once which leads me to believe that the listing agent is not acting in good faith. I would speak to your principal broker and have that individual call and discuss the matter with the listing agents principal broker.

If you are both principal brokers then file a complaint with your MLS and CA real estate board. If the listing agent is a Realtor®, she needs to adhere to the code of ethics and professional standards as well as any local rules governing short sales in your area. I for one would not take this lying down.

Regards,

Sam Purtle, Broker
Windermere Realty Group
Portland OR
yes there was money given with the contract. I think that she good a better offer and she wants the 6% instead of the 3%.
yes there was money given with the contract. I think that she good a better offer and she wants the 6% instead of the 3%.
Alan Remigio said:
To add to Bryant's comment...was there $$ given with the contract?
Listen to Sam. Get on it quick with your broker and hers.
we have treid but she will not return our calls

Alan Remigio said:
Listen to Sam. Get on it quick with your broker and hers.
Patrick, If the other Broker won't return your Broker's phone calls then have your Broker call that Broker's office phone and leave a message, that Broker's cell phone and leave a message, fax and email that your Broker has a serious matter that needs that Broker's immediate attention. If that Broker does not answer either phone message, the fax or the email then the next would be to visit their office if it's local. After all this your Broker could certainly bring ethics charges against the other.
Also you mentioned she would be getting the 6% instead of 3% - is the second offer an in-house offer? This is called "shopping offers" and is illegal, especially when one is in-house and the other is not. GOOD LUCK!!

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