Buyer backing out of no contingency contract

[Anonymous]

Anonymous wrote:

Anonymous wrote:In this area, $2K is a pretty normal deposit sum for a house with a price tag of $390K. It's really not normal to put down large deposits in this area, although that may change if buyers start flaking on a regular basis.

Umm, no it is not. We sold our place in the low $200K range. We had two offers, one with earnest money of $5K and one with $10K.

We recently bought, and our agent told us the standard EMD is 5% of purchase price. We managed to put down only 1%, but it was a point we had to haggle over with the sellers.

[Anonymous]

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

[Anonymous]

We are in a desirable neighborhood in Falls Church that feeds into McLean HS. Our neighbor's buyer backed out of the deal. They sued and won money for damages and susequently sold the house for about 7% more than first deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

[Anonymous]

Anonymous wrote:We are in a desirable neighborhood in Falls Church that feeds into McLean HS. Our neighbor's buyer backed out of the deal. They sued and won money for damages and susequently sold the house for about 7% more than first deal.

What were the actual damages? It seems like no harm was done to seller.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

Well then don't expect to win the bidding war.

[Anonymous]

OP also could sue for breach of contract, and claim as damages whatever injury she suffered.

As pointed out earlier, the contract isn't technically in breach until the buyers don't close, which could be up to 60-90 days from now. Better just to get another buyer during the busy May-June period than wait for that to occur.

[Anonymous]

Anonymous wrote:

OP also could sue for breach of contract, and claim as damages whatever injury she suffered.

As pointed out earlier, the contract isn't technically in breach until the buyers don't close, which could be up to 60-90 days from now. Better just to get another buyer during the busy May-June period than wait for that to occur.

Yes, but if the buyers have given notice they will not close on schedule, then they're in breach right now. Seller should be able to take steps to mitigate the damages by putting the house back on the market.

Bottom line: If OP can sell her house for roughly the same $390 she expected, then it's probably just an annoyance. But if it's going to cost real money, then consider getting advice from a real lawyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

OP also could sue for breach of contract, and claim as damages whatever injury she suffered.

As pointed out earlier, the contract isn't technically in breach until the buyers don't close, which could be up to 60-90 days from now. Better just to get another buyer during the busy May-June period than wait for that to occur.

Yes, but if the buyers have given notice they will not close on schedule, then they're in breach right now. Seller should be able to take steps to mitigate the damages by putting the house back on the market.

Bottom line: If OP can sell her house for roughly the same $390 she expected, then it's probably just an annoyance. But if it's going to cost real money, then consider getting advice from a real lawyer.

The question is, do you want to sell the house or stick it to the buyer? If you litigate,you won't be able to sell the house. If you are going to sue all the same, if I were the buyer I would just give no notice and not show up for closing. If I were the seller, I would want to relist as soon as possible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

Can't you just roll the EMD into the downpayment for the loan at closing? If so, why is 10% now instead of 10% at closing (say in 30 days) such a big deal?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

Can't you just roll the EMD into the downpayment for the loan at closing? If so, why is 10% now instead of 10% at closing (say in 30 days) such a big deal?

Because this buyer obviously wants to have it both ways and be able to jump out if needed.

[Anonymous]

The sooner you let them go, the sooner you will most likely really sell your house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

Can't you just roll the EMD into the downpayment for the loan at closing? If so, why is 10% now instead of 10% at closing (say in 30 days) such a big deal?

Because this buyer obviously wants to have it both ways and be able to jump out if needed.

PP here. I'm not saying I want to breach the contract. I'm saying that things happen. Suppose I get in a horrible car accident and can no longer purchase the house. If all contingencies are removed, then I lose the EMD. I think it's acceptable to lose 10,000 to 30,000 bucks to make up for the seller having to take their house off the market, but 75-100K? That wildly exceeds any damages the seller could possibly incur, especially in the type of market that would require that type of deposit. In my above example, I now am in the hospital and out six figures.
People always give sob stories I know, and a contract is a contract. All I said is I would never sign a contract that left me with that type of exposure, because I realize that unexpected things can happen. If I lose out on the hottest houses, so be it.
Sometimes you have to get out of a contract. You shouldn't sign one in which the terms of getting out will financially ruin you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Agent again.

I was afraid that what you stated as a conclusion is true: Contracts do mean nothing.

It's complete bullshit.

No, contracts do mean something, but not everything. The sellers did get $2K--as stated in the contract. If contracts meant nothing, the sellers would have gotten nothing. In this case, the agent f-ed up and should have demanded a higher earnest. And if the agent told you that $2K in the DC metro area is standard, your agent is lying. In hot markets (we live in CC DC), it's not unheard of to hear of 10% EMDs on homes that are up for bidding wars. These are homes in the $750K+ range, so EMDs are upwards of $70K. Now, that is some serious change that buyers will NOT walk away from.

OP might consider a new realtor.

I know it's necessary in some markets, but I could never put that kind of money down. Unanticipated things can happen, that could financially cripple some people.

Can't you just roll the EMD into the downpayment for the loan at closing? If so, why is 10% now instead of 10% at closing (say in 30 days) such a big deal?

Because this buyer obviously wants to have it both ways and be able to jump out if needed.

PP here. I'm not saying I want to breach the contract. I'm saying that things happen. Suppose I get in a horrible car accident and can no longer purchase the house. If all contingencies are removed, then I lose the EMD. I think it's acceptable to lose 10,000 to 30,000 bucks to make up for the seller having to take their house off the market, but 75-100K? That wildly exceeds any damages the seller could possibly incur, especially in the type of market that would require that type of deposit. In my above example, I now am in the hospital and out six figures.
People always give sob stories I know, and a contract is a contract. All I said is I would never sign a contract that left me with that type of exposure, because I realize that unexpected things can happen. If I lose out on the hottest houses, so be it.
Sometimes you have to get out of a contract. You shouldn't sign one in which the terms of getting out will financially ruin you.

As a side note, you'd be almost as ruined if you went through with the contract and then the situation you described happened (assuming 5% for realtor commissions plus the various taxes you'd have to pay if you had to immediately sell it).

[Anonymous]

Anonymous wrote:

Anonymous wrote:In this area, $2K is a pretty normal deposit sum for a house with a price tag of $390K. It's really not normal to put down large deposits in this area, although that may change if buyers start flaking on a regular basis.

Umm, no it is not. We sold our place in the low $200K range. We had two offers, one with earnest money of $5K and one with $10K.

$2k EMD sounds pretty normal. We had a seller that wanted $10k EMD because they had two prior buyers to walk and we declined. They did eventually sell but at a much lower sales price. I would never put down 10k EMD unless I really, really wanted a house. We bought a $250k property and only put down $1k EMD.