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Question about real estate contract
Posted on 8/12/12 at 6:18 pm
Posted on 8/12/12 at 6:18 pm
If a potential buyer of a house has backed out of the contract after the financing option has expired are they liable?
3
Posted on 8/12/12 at 6:35 pm to SouthlakeTiger
what does the contract say?
Posted on 8/12/12 at 6:36 pm to SouthlakeTiger
Depends how the contract was worded
Posted on 8/12/12 at 11:56 pm to SouthlakeTiger
You normally get to keep the earnest money. Your agent did get a deposit, didn't he?
Posted on 8/13/12 at 10:53 am to Layabout
The sellers refused to accept the earnest money.
Posted on 8/13/12 at 12:37 pm to SouthlakeTiger
Then the sellers are stupid and they don't have a leg to stand on.
Posted on 8/13/12 at 2:07 pm to SouthlakeTiger
quote:lol
The sellers refused to accept the earnest money.
Posted on 8/13/12 at 3:54 pm to Pilot Tiger
Anyone with serious knowledge about this, email me at bruce@photostat.org. Thanks.
Posted on 8/13/12 at 4:44 pm to SouthlakeTiger
quote:
what does the contract say?
You already have the answer. If it isn't addressed in the contract they won't have recourse. Refusing the earnest money deposit doesn't help their case.
Posted on 8/13/12 at 8:36 pm to VABuckeye
The contract states:
Buyer may give written notice to Seller within 30 days after the effective date of this contract and this contract will terminate and the earnest money will be refunded to Buyer. If buyer does not give such notice within the time required, this contract will no longer be subject to Financing approval. Time is of the essence for this paragraph and strict compliance with the time for performance is required.
I had a pre-qual letter from an lender stating that I qualified for x amount of dollars, after my house could not sell I went to this lender and they told me that I did not qualify due to debt ratio. I went to 2 other lenders who told me the same thing. I withdrew from the deal 8 days after the Financing option expired and now the sellers are suing me.
Thoughts?
Buyer may give written notice to Seller within 30 days after the effective date of this contract and this contract will terminate and the earnest money will be refunded to Buyer. If buyer does not give such notice within the time required, this contract will no longer be subject to Financing approval. Time is of the essence for this paragraph and strict compliance with the time for performance is required.
I had a pre-qual letter from an lender stating that I qualified for x amount of dollars, after my house could not sell I went to this lender and they told me that I did not qualify due to debt ratio. I went to 2 other lenders who told me the same thing. I withdrew from the deal 8 days after the Financing option expired and now the sellers are suing me.
Thoughts?
Posted on 8/13/12 at 9:03 pm to SouthlakeTiger
Most contracts include at least a clause stating that the sale is conditioned upon the sale of your house. If it doesnt have that anywhere, then you are likely not in good shape.
Posted on 8/13/12 at 9:33 pm to SouthlakeTiger
You have a lawyer? I'd be meeting with one pronto if I were in your shoes. I like to believe you're ok but I'd make sure I was represented.
Posted on 8/13/12 at 10:00 pm to SouthlakeTiger
There is a box in the contract stating wjether or not the sale was contingent upon the sale of another home. If not checked, the sellers can sue you for 10% of the purchase price and win.
Posted on 8/14/12 at 5:24 am to theoldwiseone33
quote:
There is a box in the contract stating wjether or not the sale was contingent upon the sale of another home. If not checked, the sellers can sue you for 10% of the purchase price and win.
This is on the standard LA purchase agreement. Not sure if it's on this particular contract... isn't this deal in Texas?
quote:
I had a pre-qual letter from an lender stating that I qualified for x
Those are pretty much meaningless.
quote:
I withdrew from the deal 8 days after the Financing option expired and now the sellers are suing me.
That's rough. I'd lawyer up if I were you. Without reading the whole contract it's going to be hard to help you though. But it seems there are two key issues going on.
1. You missed the financing withdrawal period (which is your fault).
2. You really needed to make this contract contingent on the sale of your other house since you couldn't afford both. (again, your fault). Was this a contingent contract? If not, I don't see how you have a leg to stand on.
If I were the seller I'd be pissed and looking to sue as well. An agreement was made between the two of you and it doesn't seem like you held up your end of the bargain. Good luck.
This post was edited on 8/14/12 at 5:34 am
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