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Old 10-29-2007, 06:57 AM
 
Location: Ohio
125 posts, read 714,664 times
Reputation: 79

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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.
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Old 10-29-2007, 07:24 AM
 
Location: Cary, NC
39,057 posts, read 67,665,365 times
Reputation: 39951
Quote:
Originally Posted by 12paws42 View Post
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!
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Old 10-29-2007, 08:05 AM
 
Location: Ohio
125 posts, read 714,664 times
Reputation: 79
Default purchase agreement

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
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Old 10-29-2007, 08:23 AM
 
Location: Cary, NC
39,057 posts, read 67,665,365 times
Reputation: 39951
Quote:
Originally Posted by 12paws42 View Post
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....
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Old 10-29-2007, 09:40 AM
 
Location: Nine Mile Falls/Spokane, WA
1,009 posts, read 4,645,272 times
Reputation: 819
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.
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Old 10-29-2007, 09:57 AM
 
582 posts, read 1,925,722 times
Reputation: 98
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.
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Old 10-29-2007, 10:08 AM
 
Location: New Mexico
631 posts, read 2,318,517 times
Reputation: 330
Quote:
Originally Posted by 12paws42 View Post
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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Old 10-29-2007, 10:49 AM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 20,838,731 times
Reputation: 6430
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!
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Old 10-29-2007, 10:54 AM
 
Location: Cary, NC
39,057 posts, read 67,665,365 times
Reputation: 39951
Quote:
Originally Posted by 12paws42 View Post
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 View Post
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.
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Old 10-29-2007, 04:07 PM
 
Location: Columbia, SC
10,220 posts, read 19,972,094 times
Reputation: 9030
I would hire a real estate attorney to review the documents.
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