I've recently closed a file for a client that involved a failed purchase. He was purchasing a property without the assistance of an agent. The vendor was also selling without an agent. That was the simple part. The next series of events make this difficult.

The parties did their own agreement through the use of Internet forms. They were not particularly well done and were largely handwritten. The deposits were paid to the vendor's solicitor. No firm closing date was set, but it was expected that the closing would occur approximately a year from the date of the agreement.

Somewhere along the way, a dispute arose between the parties. The vendor claimed anticipatory breach and refused to fulfill the remaining conditions on the agreement. The purchaser claimed that there was no anticipatory breach and they were obligated to complete the conditions under the agreement. This case will likely be headed to litigation over the return of the deposits and would likely result in several thousand dollars of legal fees incurred by all parties.

Although, based on the correspondence of the other vendor's solicitor, I believe that she should review her contract law notes from her first year of law school, my point here is not who is right and wrong. Rather, it is about the fundamental mistake that the parties made; they chose to do a deal without an agent.

I've written before about why real estate agents are important, but this situation illustrates one where a good real estate agent would be able to navigate through everything and make everybody happy. Let me address each issue individually:

The Agreement
When I first saw the Agreement of Purchase and Sale, I could see it was a mess. It didn't clearly spell out a large portion of the information relating to the property. The address of the property was crammed into a corner in someone's handwriting. No clear closing date was set. Many ordinary clauses were hand written onto a separate schedule. My client had difficulty finding every page of the agreement and his previously lawyer may not have been able to have a full view of his case.

How a real estate agent can help: Since real estate agents are required to keep full copies of the agreements in their files, it's never very difficult to obtain full and clean copies of agreements from them. They also know how to address things like closing dates and are usually able to draft basic clauses.

Conduct
In the dispute, there is some issue as to the conduct of the parties suggest certain things. Basically, the purchaser wasn't sure if he would able to close the transaction and asked the vendor if he would be willing to call it off. The vendor believes that the purchaser would not have closed, when in fact, he did have the means to close, but wanted to discuss if the vendor would want to sell it to someone else.

How a real estate agent can help: Many people who come through my door aren't the most articulate people and sometimes say something that is misinterpreted. A good agent can act as a conduit in negotiating or re-negotiating an existing contract to assist the parties in either getting a deal done or making sure everybody can have their concerns addressed.

The Deposit
The purchaser paid his deposit to the vendor's solicitor, who acts solely on behalf of the vendor. She cannot give financial advice and must act on the position of the vendor, no matter how unreasonable it may be. The vendor is insisting on keeping the deposits.

How a real estate agent can help: The agreement was signed over a year ago and many agents might suggest to release the deposits to move on and focus on a new sale which may net more money. The agent does not get paid for the failed transaction and would be willing to work again if it meant a higher sale price and thus, higher commission.

It's an unfortunate circumstance that the parties on this deal ended up the way they did. I'm not saying that things would definitely be a lot better if there were real estate agents involved, but the chances of a successful resolution without litigation would be much higher. So if you are thinking about doing a deal without real estate agents to save on commission, think twice about it before signing the agreement. And as always, it wouldn't hurt to have a lawyer look over your agreement before signing either.