Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Our contract has a loan contingency. So since we were not able to obtain a loan until selling our condo, doesnt that factor in?
Maybe, maybe not. You have to pay for the lawyer and lawsuit, in big boy court because this is too big for small claims. It's going to be expensive to get the judge's opinion.
You did not have a contingency for the sale of your property. That is what messes up your claim that you are out of the contract because your house didn't sell fast enough.
I'd hate to think that a judge is going to allow buyers with a house to sell to neglect to mention that fact because sellers don't like contingencies of a house sale before their own sale can close. You need to sell your house, it is not OK to neglect to mention it and then back out because the bank won't lend to you before your existing house sells.
However, I am not the judge that you will go on front of and I haven't read the contract. Like I said before, I am glad I am not the one that has to pay all the lawyer's fees on this one, because it might go either way. Personally, I am not eager to voluntarily enter into any lawsuit unless I am 100% clearly in the right. Even then, you never really know how a judge is going to rule. Lawsuits are high risk in addition to being expensive.
In the middle of all this the local board has come up with a major revision to the Residential Purchase Contract. This includes significant changes to the Loan and Appraisal Contingencies. For those who find the subject interesting there is a youtube. The stuff dealing with appraisal and loan contingencies is in the first 40 minutes.
*************************
1-C. THIS AGREEMENT IS CONTINGENT UPON BUYER QUALIFYING FOR A NEW LOAN: *Conventional, * FHA, * VA, * Other (specify) _______
2-C LOAN CONTINGENCY: Buyer’s obligation to purchase the property is contingent upon Buyer obtaining the loan referenced in Section 1(C) or 1(D) of the RPA unless otherwise agreed in writing. Buyer shall remove the loan contingency in writing, attempt to renegotiate, or cancel the RPA by providing written notice to the Seller no later than ________calendar days after Acceptance of the RPA; whereupon the EMD shall be released to the Buyer without the requirement of written authorization from Seller. IF this Residential Purchase Agreement is not cancelled, in writing on or before the Loan Contingency Deadline, Buyer shall be deemed to have waived the Loan Contingency. w Loan Contingency.
**************************
I expect the battle will be immediately joined. Buyers Agents will fill in the length of the contract. What then do the Seller's Agents do? Go to war over the length of the loan contingency? Should be interesting. If the buyer wishes to do so it will be a negotiable item but the Buyer is going to sign something saying they understand the risk and we will still virtually always recommend canceling if we feel there is any substantial risk to the EMD.
A net improvement? We will see. I do not like this thinking that getting buyer skin into the game is a good thing. We can't control the lenders so we will punish the customer hoping he will make the lenders better. Does not compute.
...We can't control the lenders so we will punish the customer hoping he will make the lenders better. Does not compute.
So you think it's more fair to punish a seller for a buyer's choices? Buyer chose to proceed with a purchase, buyer chose then lender, buyer is responsible for provide documentation to support the information the buyer provided to get a PQ. Tell my why you think it's not fair the buyer to have "skin in the game"?
So you think it's more fair to punish a seller for a buyer's choices? Buyer chose to proceed with a purchase, buyer chose then lender, buyer is responsible for provide documentation to support the information the buyer provided to get a PQ. Tell my why you think it's not fair the buyer to have "skin in the game"?
I would think both Buyer and Seller have skin in the game. Inherent in the process. I oppose providing a mechanism that increases the Buyer's risk due to a process the Buyer does not control. I will in general defeat the mechanism as will most competent Buyer's agents. But there will be a small set of Buyer's with less competent agents who will pay the price.
The contract always allowed such a procedure by adding a suitable clause with a counter. But it stood out as an added clause and was not buried in the boiler plate. What the board is doing is not adding a new capability but hiding it.
I would also support a statute requiring performance and commitment on the part of lenders. What we really need is some lender skin in the game.
Lender is LENDING. THAT is their skin in the game.
This buyer chose to keep back information. Now they are being asked (or were asked and hopefully paid) for that choice. Because they needed to BORROW money to buy a condo.
Lender is LENDING. THAT is their skin in the game.
This buyer chose to keep back information. Now they are being asked (or were asked and hopefully paid) for that choice. Because they needed to BORROW money to buy a condo.
Sorry but they have absolutely none until they fund. In the case of a recent deal it was likely a nasty political battle inside the bank that led to our buyer being turned down the day before closing. The Lender was utterly and completely wrong but still could simply walk away. The seller was in a truck half way to Indiana when the deal collapsed. The lender's response was "tough".
In no way would I sympathize with the Buyer's failure to communicate and probably negotiate a contract extension if that is what happened. But I have been in that situation where the Seller demands the turn over of the earnest money to extend the contract. At that point you just let the thing sit there and see what happens when it does get to a close,. Practically in the West the EMD is held by escrow who will not turn it over to either party without a court order or an agreement signed by both. Escrow companies here by the way notoriously will not honor contract clauses that turn over earnest money. They simply require a specific signed by both parties. If threatened the escrow company will resort to a"interpleader" , an action that will cost $5,000 to $10,000 which is paid out of the EMD.
The seller should pocket your $20k and put it back on the market and sell it for slightly less because house buying season is ending and the long list time will encourage lower offers. They'd be better off not offering to let you buy it for $5k more. They probaly want the $5k to justify why they would turn down a free $20k.
LOL
You seem to be under the mistaken impression that the $20k is in the owners' possession and that they can choose what to do with it. That's not the way it works. The $20k is with a third party and not even one dollar of it can be dispensed unless either both the buyer and seller agree to the disbursement, or a court orders how to disburse the money. Moreover, the seller isn't free to just re-list the property and sell it to someone else while this matter is pending; especially if the buyer files a lawsuit and records a lis pendens against the property.
You seem to be under the mistaken impression that the $20k is in the owners' possession and that they can choose what to do with it. That's not the way it works. The $20k is with a third party and not even one dollar of it can be dispensed unless either both the buyer and seller agree to the disbursement, or a court orders how to disburse the money. Moreover, the seller isn't free to just re-list the property and sell it to someone else while this matter is pending; especially if the buyer files a lawsuit and records a lis pendens against the property.
In at least one state, Florida, there is a free escrow dispute resolution process offered by the State IF and only IF the escrow in being held in a real estate broker's escrow account. Also in Florida, the seller is free to continue to market the property for sale during the dispute process. I don't know about any other states.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
