Contract A changing financing is grounds for cancellation? i have a higher cash back up contract (agreement, property)

[jackmichigan]

Originally Posted by flashprash65

Its Sunday and i just got the letter. So if they dont have funds in escrow by day 35 ... breach?

Sorry if I'm wrong about this, but it just sounds as if you're looking for an excuse to break the contract with the first party. As I read the clause that you wrote, I don't feel that they are in breach of contract. (And since you wrote it, any ambiguity in interpretation would generally go against you if it went to court.) Private financing may sound unusual to you, but the majority of my clients either pay in cash or get private financing. In fact, I closed on a deal just this past week where the purchaser received 100% financing from a private party. The percentage financed really shouldn't be a concern of yours.

Originally Posted by flashprash65

I wrote the clause in the contract.

That seemed obvious.

Originally Posted by flashprash65

instead i have an 8th grade style letter from, a couple out of state saying they commit to lend.

I didn't see anything wrong with their letter. It was succinct and to the point--and it appeared to meet your requirements. The only thing you might try to do, however, is to see if they will offer proof of funds, just to ease your mind.

Originally Posted by flashprash65

I agree. I will call a few lawyers in the morning.

Just don't keep on calling until you find someone who agrees with you. As long as you can get better assurance that Contract A will actually close, you really have no basis to try to void the first contract. Good luck...and next time you might want to consult with an attorney before you write your contract, not after.

[oldtrader]

Changing the financing is not unusual in Real Estate. It says that by day 35 financing must be fully committed in the contract. What you need to be shown, is that the financing is really available and lender is able and willing to finance the property at closing. You need to be given proof, of the financing being available and ready to close the sale.

If you try to dump the sale, to get a higher price as you are apparently looking for a way to do it, you can end up in a big law suite and your home tied up in the courts unable to sell it for a year or maybe multiple years.

Ask for proof this private lender has the ability to finance the property. It may be a relative, etc., that wants to help out the buyer. A letter from their bank, showing the money is available, etc., can solve the problem. I

[flashprash65]

Originally Posted by oldtrader

Changing the financing is not unusual in Real Estate. It says that by day 35 financing must be fully committed in the contract. What you need to be shown, is that the financing is really available and lender is able and willing to finance the property at closing. You need to be given proof, of the financing being available and ready to close the sale.

If you try to dump the sale, to get a higher price as you are apparently looking for a way to do it, you can end up in a big law suite and your home tied up in the courts unable to sell it for a year or maybe multiple years.

Ask for proof this private lender has the ability to finance the property. It may be a relative, etc., that wants to help out the buyer. A letter from their bank, showing the money is available, etc., can solve the problem. I

Thanks for the advice. Yes this is my biggest concern that they don't have the conventional financing and are just buying time. I need to know if the private has the ability to fund the deal or this is a 'buy time' ploy. If this is a smoke screen i'll lose the back up contract also. Again Thanks

[Sunflower--girl]

Maybe my situation will help you.

I had contract on a house. Went through appraisal and home inspection. Needed repairs to pass FHA appraisal. Seller agreed to repairs. Said the repairs were complete. Paid for appraisal #2. The repairs were not complete (they had a man there with a crow bar prying the windows open). They claim they are ordering new windows. I get my committment and forward it to them. Seller gets second offer and asks me to terminate. I refuse. They drag their feet on the repairs and contract expires. As soon as contract expires they are under contract with offer 2.

Here is what my attorney said. Short but sweet. I don't need him. I can go to court myself and win. I am in the process of taking him to small claims court to recoup my money on everythihng I had to put out and have a contract on another house.

Here's the best part. I will close on the secoind house before the seller of the first house closes with his second offer...

[FalconheadWest]

Originally Posted by Sunflower--girl

They drag their feet on the repairs and contract expires. As soon as contract expires they are under contract with offer 2.

What state are you in? The Texas contract doesn't allow a contract to expire because of repairs. The contract AUTOMATICALLY extends when LENDER-required repairs haven't been completed. I can't imagine other states don't have similar language when the lender is requiring something.

[FalconheadWest]

Originally Posted by flashprash65

The written notification/letter i wanted was that full underwriting has been done and all finance contingencies have been met ( POF, income verification, appraisal, credit, seasoning of funds etc.... ). I was a mortgage broker years ago and once i got full underwrting approval with all stipulations and requirements met, it was a done deal. instead i have an 8th grade style letter from, a couple out of state saying they commit to lend.

It must have been YEARS and years ago, because I've been doing this 13+ years and I've never seen a letter like what you just described. And you also can't force them to go ahead and put their money into escrow for the remaining 25 days. The escrow account is interest free and just sitting there. You can want it all you want, but you're not entitled to it. You're not entitled to a lot of what you're asking. You're only entitled to the buyer showing up and closing as they've already told you they have someone committed to lending the money.

[Sunflower--girl]

Originally Posted by FalconheadWest

What state are you in? The Texas contract doesn't allow a contract to expire because of repairs. The contract AUTOMATICALLY extends when LENDER-required repairs haven't been completed. I can't imagine other states don't have similar language when the lender is requiring something.

South Carolina

[flashprash65]

Originally Posted by FalconheadWest

It must have been YEARS and years ago, because I've been doing this 13+ years and I've never seen a letter like what you just described. And you also can't force them to go ahead and put their money into escrow for the remaining 25 days. The escrow account is interest free and just sitting there. You can want it all you want, but you're not entitled to it. You're not entitled to a lot of what you're asking. You're only entitled to the buyer showing up and closing as they've already told you they have someone committed to lending the money.

if you're a mortgage broker you've never gotten an email from underwriting saying they are clear to close all stips have been met? I'm not requesting money in escrow, I want the finance contingency met within 35 days

[FalconheadWest]

Originally Posted by flashprash65

if you're a mortgage broker you've never gotten an email from underwriting saying they are clear to close all stips have been met? I'm not requesting money in escrow, I want the finance contingency met within 35 days

I'm not a mortgage broker, I'm a Realtor. My clients tend to get their "clear to close" about 3 days prior to closing as the attorney takes 1 day to process, docs take another day to process and then we close the next day. It's rare to have financing in place more than 3 days prior to closing, but recently, I had one ready 2 weeks before closing and another 1 1/2 weeks before closing. This is not typical at all. And we also don't do 60 day escrows. We do 3-4 week escrows. Sometimes, they go into 5 weeks depending on the situation.

[cully]

[quote=flashprash65;32538727]The written notification/letter i wanted was that full underwriting has been done and all finance contingencies have been met ( POF, income verification, appraisal, credit, seasoning of funds etc.... ). I was a mortgage broker years ago and once i got full underwrting approval with all stipulations and requirements met, it was a done deal. instead i have an 8th grade style letter from, a couple out of state saying they commit to lend.[/quote]

If you haven't already...

Have you googled the couple's names? And google their address separately in case something comes up from their address.

Look them up on fb.

Look your buyer up on fb. And google him too.

I have found out amazing stuff doing this when concerned.