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We live in Massachusetts. After all contingencies have passed, the buyer of our home informed us on the evening before closing that they needed an extension for closing. They are having issues with the sale of their current home and wish us to wait due to issues they have to fix with their other home. Their offer to purchase our house specifically stated that the offer was NOT contingent on the sale of their current home. There is no contingency in the purchase and sale regarding their current home. They want a three week extension. They have misled us regarding (1) the need to sell their current home and (2) they also produced a "FINAL COMMITMENT" letter from their mortgage company and a truth in lending statement last week to show us that they would meet the closing date but would not share with us the contingencies (the sale of their other home) We have already kept our home off the market for two months and we do not want to have it off the market for essentially the entire month of June especially if we don't trust that they will come through in three weeks. It is too big of a risk. After letting us know on the night before the closing that they would need an extension, they "went dark" and did not communicate until 4:55 PM Friday (the day of the scheduled closing). The house is empty, broom clean, etc. We are currently out of contract. My broker says we need a release from them in order for us to put our house back on the market. Can they hold our house listing hostage so that we release the deposit back to them?
We believe we have a clear claim to the deposit but this really isn't about how good our claim is. It seems like, in Massachusetts, regardless of how clear our case is, we have to sue and the legal fees and court costs come out of the deposit which doesn't seem to make it any type of a remedy for us. Our attorney says that the system in Massachusetts is designed to encourage the deal to get done. It seems like, hypothetically, any buyer can put in offers that are not contingent on the sale of a house, give misleading documents saying that they are all set for the mortgage, and if something goes wrong with the sale of their current house, simply not show up at the last minute and hold the seller's empty house hostage until they get their deposit back or their house sale goes through. The contract clearly states that the buyer would owe the seller the deposit if they default but it seems like in reality this isn't what happens. Can this really be the system? Why should the seller be forced to unknowingly take on the uncompensated risk for the sale of a buyer's current home?
I would agree with your attorney. The system is setup to discourage deals from falling apart. However, some deals cannot and should not be saved and the system is not setup to help sellers in those situations.
Our state has a history of biasing one party of another. Have you ever taken a look at the tennant/landlord laws? There's a clear bias toward the tennant in them and it's as if the landlord has no rights despite them being the owner of the property. Don't ever try to evict someone in this state. The process is extremely long and extremely expensive. You might as well just let the tennant live in your property for free until they decide to move on their own.
Happened in Andover MA. We had a buyer not show up at closing. I was not there but my lawyer was. I was told I could do this and that, keep this and that, etc. I said I want them SOB's out of my life as soon as possible and my house back on the market ASAP. The broker said come to my office, sign a few papers, and we will make it happen. I had calmed down by the time I got to the brokers office. She said her/my agent had talked to the buyers, they had gotten cold feet and were scared. She said we were so far along with the buyers (house inspection, mortgage approval, etc.) it would be best to give her agent a few days to talk to the buyers. I still wanted them out of my life but I agreed to wait a few days.
Two days later my broker called and said the agent and the buyers were in her office and the buyers were very remorseful. They wanted to make the deal happen. I wanted something out of the deal for my aggravation. I said my lawyer was going to bill me for the no show closing so they had to pay my lawyers closing fee ($350???) for the new closing. They agreed, the deal went down a few days later.
The thing I remember the most was the advice of the broker. She aid all had worked so hard for this deal that it was probably best to wait a bit for the buyer before starting all over. In the case of the OP maybe the best advice is extend the closing date. Their choice.
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