Anonymous
05/20/2014 09:52
Subject: Buyer backing out of no contingency contract
If they back out, you will at least likely get the earnest money deposit.
It is unfortunate that you chose an offer with such a small earnest. Your realtor should have told you to choose one with a higher earnest. S/he should have known that waiving all contingencies means little if the earnest is so small.
FWIW, we put an earnest of 8% on a house we knew was going to be a bid situation. Even though other offers (including an all cash offer from a developer) were in other ways more attractive, the sellers wisely chose our offer because they knew we were highly unlikely to back out, and they needed to sell.
It is unfortunate that you chose an offer with such a small earnest. Your realtor should have told you to choose one with a higher earnest. S/he should have known that waiving all contingencies means little if the earnest is so small.
FWIW, we put an earnest of 8% on a house we knew was going to be a bid situation. Even though other offers (including an all cash offer from a developer) were in other ways more attractive, the sellers wisely chose our offer because they knew we were highly unlikely to back out, and they needed to sell.
Anonymous
05/20/2014 09:52
Subject: Buyer backing out of no contingency contract
2K is nothing to the buyers. If that's all they are going to loose, I'm sorry to say, I think it was a pretty good strategy.
Anonymous
05/20/2014 09:46
Subject: Buyer backing out of no contingency contract
Get over it OP. This happens all the time. Just relist and move on. It doesn't mean that your house will sell for less now.
We were in a situation where we had to get out last fall and I'm sure the sellers wondered why. We suddenly got jobs a couple of counties over and just needed out. We loved the house, but needed shorter commutes. The jobs came out of the blue, so it wasn't something we could have planned. The house sold for 20k more than we were under contract for, so I'm sure the sellers were pleased we walked.
We were in a situation where we had to get out last fall and I'm sure the sellers wondered why. We suddenly got jobs a couple of counties over and just needed out. We loved the house, but needed shorter commutes. The jobs came out of the blue, so it wasn't something we could have planned. The house sold for 20k more than we were under contract for, so I'm sure the sellers were pleased we walked.
Anonymous
05/20/2014 09:43
Subject: Buyer backing out of no contingency contract
I have had this happen twice, different properties. The managing broker in the Real Estate office with my listing agent handled it for us, along with a lawyer we hired. We ended up with the entire deposit in one case and in the other case the BUYER's agent, whose client defaulted wanted half of the deposit and got it. Sleazy asses. We could have fought it but the money paid to the Lawyer adds up and the property is tied up, just better to move on.
Anonymous
05/20/2014 09:33
Subject: Re:Buyer backing out of no contingency contract
Anonymous wrote:Agent here.
So the buyers essentially presented an offer that had no contingencies and they want to walk. Wow. I can't say this isn't unusual because buyers are doing all sorts of things to get houses. You could actually sue them for the deposit and more - but this is up to a settlement attorney to decide first. The settlement attorney should hear both sides and then tell the buyers - you don't get your $2K back. The buyers need to agree to release it. If they fight, they actually still have an interest in the house and you can't relist or sell to anyone else until you agree to give these asses back their money and they sign a release. It's pure and utter BS, I have a buyer who got cold feet the MORNING of settlement and is current in litigation for the deposit back which the seller won't release. Can't blame the sellers for fighting my client.
In your case and in the case with my client - if the buyers win and get to walk away and keep their deposit, it sets a whole new precedent for contracts becoming meaningless. Unbelievable.
Call the settlement attorney tomorrow and see what they say. Will you report back? I'm curious.
This is your problem -- they could just be holding out. Buh bye!
Anonymous
05/20/2014 09:31
Subject: Re:Buyer backing out of no contingency contract
OP we had someone cancel their contract on our house. It came as a huge shock b/c we were paying 2 mortgages at the time. They backed out using the HOA clause, which they had a right to do. But we just went right on and relisted the house. We had another contract in a week, which went through without a problem. Lesson learned: you might be better to let them go and move on, then get all embroiled in a legal dispute which keeps your house off the market. It might even be a ploy to wear you down. Six months from now when you are still fighting over that 2K, you may be forced to sell for less.
Anonymous
05/20/2014 09:11
Subject: Buyer backing out of no contingency contract
My friend had to forfeit their security deposit due to a divorce. It was over 15K. I think a strongly worded legal letter to the buyer demanding the 2000 and a list of damages would get them to either change their minds or give you the money.
Anonymous
05/20/2014 07:41
Subject: Buyer backing out of no contingency contract
Where are you located, OP?
Anonymous
05/20/2014 07:38
Subject: Buyer backing out of no contingency contract
Seriously, you just need to move on and find a new buyer. You can review your contract or have an attorney review your contract to see what part of the 2K gets returned to you. We had the same experience and yes it took and extra month to sell our house, but in the end it all works out. Good Luck.
Anonymous
05/20/2014 07:37
Subject: Buyer backing out of no contingency contract
Use some the 2k to spruce up your wardrobe. Let the buyers know that.
Anonymous
05/20/2014 07:27
Subject: Re:Buyer backing out of no contingency contract
Anonymous wrote:Definitely speak with a real estate attorney. A court could (and probably would) order them to go through with the sale. You could probably find an attorney who would take the case on contingency. Let the sellers know that you are planning to sue to enforce the contract and will seek any other damages possible (like attorney fees).
There is a reason litigators would never litigate a personal matter. This all sounds good but it is not worth it.
Anonymous
05/20/2014 07:24
Subject: Re:Buyer backing out of no contingency contract
Anonymous wrote:It's the agent again.
These are all good questions. I agree, I was stunned when my client just up and decided to not buy the house for no real substantial reason. It's been going on for months now. Unfortunately, everyone has to get lawyers if the settlement attorney can't handle it.
In your contract the buyers should have named a settlement attorney. You need to contact that company and explain what's happening and see what they say. They represent the contract - not either side. Their opinion will be most important here because even if both sides get lawyers (I know - you don't want to do that but just as an example) the lawyers have to call the settlement attorney to get the scoop, and the settlement atty is going to say the same thing to them that he said to you and the buyer. So that becomes important because it's not worth it for each side to lawyer up just to all reach an agreement that would be what the settlement agent says anyway.
The other bullshit thing here is that you forfeited other offers for theirs because it appeared more solid, and as such, you likely have much more than a $2000 loss here - and should you lawyer up, that could be proven. Your goal should be to get back on the market asap before the summer starts though, and as much as I would love to see you force their ass to buy, it's doubtful you can make them. I never thought my client would go so off the wall batty and fight this the way it's been going - my client is dead wrong. But we'll see what happens. It's been going on for 3 months now. Don't be in this boat - I hate to say it but you probably have to let those assholes go so you can sell your house asap.
Your agent also needs to scare them and say to their agent that you have zero plans to release their deposit.
No one is going to be frightened over losing a $2K deposit. They will walk easily
Anonymous
05/20/2014 07:23
Subject: Re:Buyer backing out of no contingency contract
Definitely speak with a real estate attorney. A court could (and probably would) order them to go through with the sale. You could probably find an attorney who would take the case on contingency. Let the sellers know that you are planning to sue to enforce the contract and will seek any other damages possible (like attorney fees).
Anonymous
05/20/2014 07:21
Subject: Re:Buyer backing out of no contingency contract
Anonymous wrote:We dont even have a settlement date yet. We signed the papers last week and are waiting for the appraisal, which they also stated in the contract that they would cover if it comes in up to 10k below sales price. Our agent is trying to save the deal and I will report back. Just seems odd that it is so easy to walk away. This is extreme but can I force them to buy, isn't this a breach of contract? I too think its crazy that a signed contract is useless.
A signed contract is useless until you enforce it. To enforce costs time and money and your chances of making the buyer perform are slim
You are also unlikely to e able to kep the $2,000 deposit because the buyer will refuse to sign a release of the contract. You can always try to re-sell the property pending the release but then you would have to beg a re,ease from the buyer and they would want more money from you to sign it. Better sign now and make them release their interest in your property
A contract is good when the parties proceed in good faith. If not, your situation occurs
Anonymous
05/20/2014 06:36
Subject: Re:Buyer backing out of no contingency contract
NP here- are HOA docs involved in this transaction? If so, have the buyers rec'd those docs and the three day window for review has passed? Even if someone makes an offer w/ no contingencies, the HOA docs thing is kind of it's own beast, right? Or buyers can say they waive that, too? (I recall something about the HOA doc review being it's thing- a real estate law that holds no matter what- but maybe my memory is awfully bad!)
Your situation sounds really stressful, OP.
Agree with others that if contracts are not upheld, the consequences will be dire.
Your situation sounds really stressful, OP.
Agree with others that if contracts are not upheld, the consequences will be dire.