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Old 07-05-2009, 11:35 PM
 
3 posts, read 36,553 times
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I have an "As Is" contract in the state of Florida for my home, which was signed by the buyer on June 9, 2009 and I signed it on June 22, 2009. It is clear that in the contract that the buyer's Inspection period and right to cancel is 5 days from the Effective Date. The buyer put $10k in escrow deposit. Today, July 6, 2009, the buyer has informed us that they now want to back out of the contract. We planned to close on July 7, 2009, and per the contract we are supposed to close by July 15, 2009.

The buyer wants to cancel the contract because they do not like the condition of the house. They do not like to stove (but there is one there and it works). They wanted ceiling fans and an over-the-range microwave, however these 2 things were not included in the Seller'e Real Property Disclosure Statement that I signed.

The house is a short sale. Is the buyer able to back out? If they do back out, do they forgo their escrow deposit to us? Do I need a real estate lawyer?

My real estate agent says that they can walk away from the contract, but don't think they can free and clear... please help.
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Old 07-06-2009, 12:35 AM
 
Location: Central New Jersey
1,289 posts, read 5,823,896 times
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From what you are telling us he should not be able to back out but if there is more to the story it might be possible. Are you in Attorney Review, Under Contract, Waiting for closing with everything done? Can he not get a mortgage? Point is whatever the issue is, you are going to need to have your attorney draw up a letter to his attorney and you are probably going to have to sue to execute the contract. If this is as clear as stated then you are entitled to the money in escrow but his attorney can tie that up and keep you from getting it for a while as well. I have been doing this for years and have seen this take months and sometimes even YEARS to win a verdict.
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Old 07-06-2009, 12:47 AM
 
Location: Tempe, Arizona
4,511 posts, read 12,879,859 times
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As this is a short sale, has the bank already agreed to accept it? If not, many contracts include an addendum allowing the buyer to cancel prior to bank approval (we have that in AZ). It may depend on what is the effective date. Again in short sales we use an addendum here that says it is when the bank agrees to the short sale.

In any case, it would be impossible to provide any further advice without knowing what is allowed or not in your contract. Ask your Realtor to review the contract with you and point out what is allowed and when the contingencies are in effect.
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Old 07-06-2009, 12:47 AM
 
3 posts, read 36,553 times
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Default cash buyer no financing contingencies.

I am under contract and simply waiting to close, which was supposed to be two days from now.

If I sue, will it prevent me from being able to sell my house to another buyer?
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Old 07-06-2009, 12:50 AM
 
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Default bank approved the short sale

the bank definately approved the short sale and the $ amount long ago...

also what is attorney review in regards to the sales contract?
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Old 07-06-2009, 12:58 AM
 
Location: Tempe, Arizona
4,511 posts, read 12,879,859 times
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Quote:
Originally Posted by cherylcheok View Post
the bank definately approved the short sale and the $ amount long ago...

also what is attorney review in regards to the sales contract?
The comment about attorney review was from an agent in a state (New Jersey) that uses attorneys to finalize contracts and handle escrow. Other states like in Arizona do not involve attorneys. Escrow is handled by a title/escrow company. The escrow company should review the contact and take inputs from buyer and seller as to disposition of earnest money. Your contract should indicate what happens in case of a dispute, typically some form of mediation. You may also want to consult with an attorney to determine other legal options.
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Old 07-06-2009, 01:02 AM
 
1,121 posts, read 3,459,751 times
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Your buyer can walk on any contingencies in the contract with his full ernest money.
Commonly that could be, but is not limited to inspection, financing, appraisal, and short sale approval. At this point, if you don't have another buyer, you may be able to negotiate a few points to get your sale closed.
He also has the right to cancel the contract for any reason, but if it is not contingent, the ernest money usually defaults to you less any closing expenses incurred.
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Old 07-06-2009, 01:06 AM
 
Location: Colorado Springs, CO
1,570 posts, read 5,707,072 times
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It depends on what state you are in - and what your contract says.

Here in Colorado we do no have attorney review periods. The dates on the contract outline when the property condition objection and resolution dates are. A bank addendum will usually override those dates. Typically, the "effective date" is the date when the bank signs the contract -- again, "typically" and there is almost nothing typical about a bank addendum. (It can drive you crazy)

From what you are saying the buyer can back out 5 days from the effective date. So, you will need to be check what date is the effective date. Was it the date you signed, the bank signed, or the buyer signed the contract? First, you must determine the effecive date.

Second you need to ask your agent WHY s/he thinks the buyer can walk.
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Old 07-06-2009, 07:08 AM
 
Location: Hernando County, FL
8,488 posts, read 19,413,746 times
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You say the lender approved the short sale and price but did they approve the current Purchase and Sales agreement? Do you have written authorization from the lender to close, if not then you are not truly approved yet. Besides that, the Shortsale addendum states that the effective date is when the seller provides written authorization from the lender to the seller to close. I don't think the lender gave you written autorization the same day you signed the P&S agreement.

Were the ceiling fans and above range microwave in the home during the showing. Did you exclude them on the P&S agreement?

There were 9 days between the 22nd and the 3rd. (weekends don't count in time periods under 6 days on Florida P&S agreement) Is it possible there was a delay on your agent getting a signed contract to the buyers agent.

Trying to go after the deposit will hold you up from trying to sell the home and do you think the lender is going to let you keep the deposit anyway?
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Old 07-06-2009, 07:20 AM
 
Location: Venice Florida
1,380 posts, read 5,598,322 times
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I'm not sure which contract that you used, but the as-is contract normally has a dollar amount associated with the problems discovered during the inspection period. If the cost to make repairs exceeds the stated amount then yes the buyer can choose not to close on the property and should be able to have their deposit returned.

The items you listed do not sound like defects discovered during inspections, but if they specified $0 in the dollar amount then they should be able to walk for any reason.
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