72 hr bump clause (contingencies, agent, sale, settlement)

[Yknowgirl]

We have executed our 72 hr bump clause with #1 position buyers. They say they can remove their home sale contingency because they have a retirement fund. Can I demand proof of those funds or a committment letter of sorts? I would like to move on to buyer #2 because I don't feel like I have any solid proof of funding such as a letter from a loan institution, which is what we have with buyer #2. Do I have to accept #1's word for it or can I bump them if they fail to prove the funds within the 72 hrs? Very grey area! Also, do they have to move straight to closing since the sale of their home is no longer involved?

[Sarasota Sandy]

It is very common to ask for proof of funds and/or a preapproval letter from a buyer. I am not sure what is common practice in your area. However, if they are removing a contingency, you should make sure they have to funds to move forward. Ask your Realtor for assistance.

[rrah]

This proof of funds requirement (or any other requirement) should have been in the original contract.

If they remove the contingency, than they cannot use that as an excuse for failure to close. As I recall, there is sometimes a clause in a contract that will also remove the financing contingency simultaneously. I don't know what your contract states.

If there are other contingencies, e.g. inspections, that have not yet been removed, those will still apply. If this was the final contingency to be met, than you close the date stated in the contract.

[Rakin]

If they remove the Contingency, it is their option not yours. You and your agent determined the perameters when you signed the contract.

You probably have no options. It's all in the Buyers hands.

[cully]

Ah, good, you got your own thread going

[cully]

Right, there should be language in your contract about financing the home...and proof thereof.

Areas I'm familiar with the seller begins the 72 hour kick out clause when a better buyer comes along and that new contract has been fully negotiated and is in place as the back up with all knowing now buyer 1 will have 72 hours to be able to step up.

I guess Buyer 1 wanted to sell their home, made the offer contingent, decided they didn't want to miss out on getting yours and decided to use retirement funds while they continued to sell their home.

Questions would be can they afford that. Maybe their current home is paid off. Maybe the retirement funds will pay for your home entirely. Maybe they left out the few tens of thousands or more they will be short and thought they'd finance but can't because of what they will be paying simultaneously on their current home.

Even if people are paying all cash and are the primary contract, they still need to provide proof of funds from the bank.

Question, is Buyer 1 still wanting a 2 month or so settlement (hoping to sell his own home). Or, can he access his retirement funds immediately and offer a settlement now a few weeks out?

At any rate, check your contract for financing and proof of funds. Hopefully, any blanks were filled in by your Realtor.

[FalconheadWest]

This is my response from the other thread you posted on:

"Why would a buyer remove the contingency if they don't have the funds? The contingency calls for them to retain their earnest money if the contingency doesn't come thru. If they remove it, they are putting their thousands of earnest money at risk. In Texas, they even have to put up additional earnest money in order to remove the contingency. I know you want proof, but honestly, what good does it do if they're willing to lose the money by waiving the contingency. It means they want to perform no matter what. And if it's not in the actual contract, you can't enforce it."