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It is one day before the closing date for the house we are selling and the new buyer and his wife spend a hour in the home doing a final walk through. After they finish the walk through they look at each other and say" "We got to talk." They walk off and return a few minutes later and tell everyone that they lost interest in the house. There is nothing wrong with the house, they just don't feel like it is right for them. (All contingencies were satisfied)
So what happens now? They said in theory we can get the $8000 in earnest money from the escrow company, but it could take months and if the buyer fights it in court we may have to hold off putting our house back on the market until the lawsuit is settled. What would you do in this situation? Don't tell me to talk to our agent or an attorney. That's a given. I am just curious if this has happened to anyone you know, or you have any observations about this horror.
It is one day before the closing date for the house we are selling and the new buyer and his wife spend a hour in the home doing a final walk through. After they finish the walk through they look at each other and say" "We got to talk." They walk off and return a few minutes later and tell everyone that they lost interest in the house. There is nothing wrong with the house, they just don't feel like it is right for them. (All contingencies were satisfied)
So what happens now? They said in theory we can get the $8000 in earnest money from the escrow company, but it could take months and if the buyer fights it in court we may have to hold off putting our house back on the market until the lawsuit is settled. What would you do in this situation? Don't tell me to talk to our agent or an attorney. That's a given. I am just curious if this has happened to anyone you know, or you have any observations about this horror.
Unfortunately, the best anyone is going to be able to tell you is that you will probably get to keep their escrow money.
**As you read my OPINION here, please remember that I am NOT an attorney, and I am NOR YOUR real estate agent. What I say here is an informed opinion, but may not be completely applicable to your situation because each state has different laws and procedures, and each contract is unique. Refer to YOUR contract and YOUR advisers, including your real estate agent and ATTORNEY.**
That said, the buyer should be reminded that breaching the contract now and not buying the house may have significant implications to them, mostly financial. If they still insist on backing out for the reason you gave, your contract probably outlines your remedy, and there appears to be no reason for them to contest that remedy. If they don't fight it, you should be able to get your house back on the market pretty quickly. If they decide to fight it, ask your attorney if a better option might be to give them their deposit money, just so you can move on and get the house sold again, and then sue them for the damages later.
When I see a house go back on the market after saying contract fell through I always thought it was a real estate agents sales gimmick that tries to make a now stale house look fresh again. Buyers will still see the house as stale and now it likely worth 10% less.
When I see a house go back on the market after saying contract fell through I always thought it was a real estate agents sales gimmick that tries to make a now stale house look fresh again. Buyers will still see the house as stale and now it likely worth 10% less.
While YOU may think that, I don't believe that most home searchers see it the same way.
While YOU may think that, I don't believe that most home searchers see it the same way.
I also haven't seen that happen here.
The contract will spell out what happens to the earnest money. The buyer needs to provide a written notice of cancellation spelling out the reason for cancelling. The sellers agent should provide guidance here, and would most likely inform the title company that in accordance with the contract, all contingencies have been removed and the buyer is in breach of contract by cancelling, therefore the buyer forfeits the earnest money. The title company will review the contract, and if they agree, they will send the forfeited earnest money to the seller.
But remember, your agent and your attorney will provide the best advice because they will see your buyers cancellation letter and will know your contract and state laws. Agents on here can only talk about our opinions in accordance with our state laws and contracts.
When I see a house go back on the market after saying contract fell through I always thought it was a real estate agents sales gimmick that tries to make a now stale house look fresh again. Buyers will still see the house as stale and now it likely worth 10% less.
I typically assume that the buyer's financing fell through (I feel like this is a common reason). Also, if the house is comparably priced to other homes in the area - I don't see how making the listing "active" again will cause the value to drop. It may even renew interest since it's now not the "one that go away".
But in states like Florida (my state), you may try to force the buyers to purchase the property or threaten a "specific performance" clause penalty.
It's up to the courts to decide which or if any damages the seller may receive from the buyer who backs away from a legal binding contract where the seller has met all the requirements (in your case, 1 day before and with the final walk through).
In terms of suing and for how much. If you have a home for contract price of $200K. And know buyer walks away from sale at last minute. If in 6 months you may end up selling it for say 180K. The courts may determine that the buyers may owe you $20K plus interest.
In reality the legal costs of pursuing a case again the buyers may end up costing too much money.
In your case, keep the deposit. Have buyer waive all future rights to sue you for the deposit money. If they resist, threaten legal action. It seems pretty clear cut in your case with final walk through. Buyers have financing approved. You've (I assume) kept the home up to par, may necessary repairs etc.
Talk to an attorney if needed. You could threaten to sue for "Performance" and or damages. This could get them to move forward with closing.
There is usually a procedure for claiming their EM. Make sure you do this in a timely manner.
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