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I had buyers for my home in Ohio in July; they signed a purchase agreement (with a realtor)and went through the loan process, which they had a letter from a lender stating that they were prequalified. Something showed up in the 11th hour with a student loan and they couldn't go FHA, then their lending instituion went belly up. We agreed to a lease where they would live in the home and pay the mortgage until they could get another loan - the lease is for 1 year.
Their mortgage lender is ready to begin the loan process again and can't contact them; they won't answer the phone and won't return messages. They are still in the home and paying the mortgage, but if they don't get the process started, they won't be approved.....
Aren't they legally bound by the purchase agreement completed with the realtor? Not to mention the lease (which I understand is easier to probably get out of?) The lease states that it is a lease agreement to the purchase of the home once they get loan approval.
I had buyers for my home in Ohio in July; they signed a purchase agreement (with a realtor)and went through the loan process, which they had a letter from a lender stating that they were prequalified. Something showed up in the 11th hour with a student loan and they couldn't go FHA, then their lending instituion went belly up. We agreed to a lease where they would live in the home and pay the mortgage until they could get another loan - the lease is for 1 year.
Their mortgage lender is ready to begin the loan process again and can't contact them; they won't answer the phone and won't return messages. They are still in the home and paying the mortgage, but if they don't get the process started, they won't be approved.....
Aren't they legally bound by the purchase agreement completed with the realtor? Not to mention the lease (which I understand is easier to probably get out of?) The lease states that it is a lease agreement to the purchase of the home once they get loan approval.
This is SO much a question for your attorney who handled the lease!
No attorney for the lease, it was a legal document drawn up between us (the sellers) and the buyers; notarized. BUT the purchase agreement was done by a real estate agent
No attorney for the lease, it was a legal document drawn up between us (the sellers) and the buyers; notarized. BUT the purchase agreement was done by a real estate agent
Ouch.
Bad deal, to proceed without an attorney, IMO.
It will still probably end up a legal issue, or already is a legal issue. I suggest you find a good real estate attorney and get a consultation, if you think things are not proceeding per the agreement.
Have you gone to the house and just asked them how they are doing, and the status of the loan/loan application?
I did a blog for Buyers on how to avoid Lease-Option scams, and it included having an attorney draw up or review any contracts.
Apparently the shoe is on your foot.
I'm sorry to hear of your problem.
Glad I'm not the agent who helped with the agreement....
It depends on the status of the contract they signed. Did you establish a new closing date after they failed to qualify on the first one? Has anyone talked with them about their intentions? Is there a buyer's agent involved or is your agent representing both parties? Finally, what is YOUR preference - do you still want to sell the house? Lots of unknowns with this situation and the outcome really depends on how the contract was written.
You said that the lease was for one year from July, perhaps they are just not ready to start the loan approval process? It shouldn't take 9 months to get approved for a loan, so maybe they want to get a loan when it gets closer to the end of the lease? You should try stopping by there to check up on them. It is still your house until they purchase it.
Their mortgage lender is ready to begin the loan process again and can't contact them; they won't answer the phone and won't return messages. They are still in the home and paying the mortgage, but if they don't get the process started, they won't be approved.....
Aren't they legally bound by the purchase agreement completed with the realtor?
Somewhere in your agreement with them I would think "Time is of the essence", which not returning calls is in conflict with that. Also I would think somewhere in your agreement it would also state they would diligently move forward to obtain a loan. Sounds like breach of contract from what I'm reading. If the lease is tied to the purchase, would this not be default? Time for action in writing to evict and put back on the market if they won't respond? Of course a real estate atty would clear it up for you.
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If it's a lease OPTION then they have the option but not the obligation to purchase. If I were in their shoes I wouldn't pursue the financing til much closer to the end of the option period. Obviously the contract language governs your agreement and you should check with an attorney to see what your rights and obligations are.
I had buyers for my home in Ohio in July; they signed a purchase agreement (with a realtor)and went through the loan process, which they had a letter from a lender stating that they were prequalified. Something showed up in the 11th hour with a student loan and they couldn't go FHA, then their lending instituion went belly up. We agreed to a lease where they would live in the home and pay the mortgage until they could get another loan - the lease is for 1 year.
Their mortgage lender is ready to begin the loan process again and can't contact them; they won't answer the phone and won't return messages. They are still in the home and paying the mortgage, but if they don't get the process started, they won't be approved.....
Aren't they legally bound by the purchase agreement completed with the realtor? Not to mention the lease (which I understand is easier to probably get out of?) The lease states that it is a lease agreement to the purchase of the home once they get loan approval.
Quote:
Originally Posted by DMenscha
If it's a lease OPTION then they have the option but not the obligation to purchase. If I were in their shoes I wouldn't pursue the financing til much closer to the end of the option period. Obviously the contract language governs your agreement and you should check with an attorney to see what your rights and obligations are.
Good Luck!
Having re-read the thread, I strongly suggest you:
1. Ask them what the status is.
2. Get to an attorney and ask the attorney what you signed, what your exposure is. They are "paying the mortgage?" That is YOUR credit on the line.
I would hire a real estate attorney to review the documents.
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