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.
I also can tell you it impacts the resale nada. I've had situations like that happen before, with financing fails, and in some cases I got more for my sellers. Help me out here agents...I think something like 25% of transactions are failing over financing these days so it is really common to have a late sale fail. I'm not hearing stories of home prices dropping 10% as a result of that. It isn't true for my area, anyway.
There are buyers chomping at the bit hoping sales will fall through so they can get the house. Falling through in this area is a blessing for waiting buyers.
So pony up with a lawyer. If they tie the house up so you can't sell each payment you make during that period is financial damage and most contracts allow for legal fees to be covered also. If they are clearly in breach and they know it and they are presented with these facts it may encourage them to sign the release or move forward and close. Of course this isn't legal advice so discuss with a real estate attorney to see if your contract allows for this.
There is no cancellation letter just verbal comments from the buyer of the house that he will do what he can to get his earnest money back. He is not silly enough to put anything in writing, he is just dragging his feet because he knows that he can hold us up and we may fold and just let him get his money back. Until we get something in writing from him the house will sit there empty.
I have read through all posts in this thread and am still really confused. When I bought my current house back in May (signing the contract & giving the earnest money deposit in February), there was a drop-dead date that I had to meet. If I had suddenly changed my mind at the walk-through, I certainly would have been out of luck in terms of getting my EMD back, and I would have been bummed but certainly would have understood it was my own d*** fault.
How on earth could the buyers believe that they are entitled to get the EMD back if all contingencies were met and they simply changed their mind at almost literally the last minute?
But I especially don't understand how your contract could be missing an end date after which the property is supposed to have changed hands? That makes no sense. If you were one day away from closing when you did the walk-through, why aren't the buyers now in breach of contract?
Last edited by karen_in_nh_2012; 12-07-2012 at 02:28 PM..
So pony up with a lawyer. If they tie the house up so you can't sell each payment you make during that period is financial damage and most contracts allow for legal fees to be covered also. If they are clearly in breach and they know it and they are presented with these facts it may encourage them to sign the release or move forward and close. Of course this isn't legal advice so discuss with a real estate attorney to see if your contract allows for this.
Op, In TX they have 7 days to release the EM or you can claim 3 Times the amount. That's a huge incentive to not tie it up.
The agent says the buyer can drag his feet for months waiting
Stop Taking Your Legal Advice From A Real Estate Agent!
Get a lawyer to send them a strongly worded letter about specific performance and damages from breaking a contract. That will most likely tune them up and it will be the end of the issue.
^^^this!!! OP, you've said you know you must talk to an attorney, but you apparently have not done so, despite your being given very good reasons to doubt the advice your agent has given you. I also believe your agent and the other person you cited are simply wrong (much of what they said defies common sense, as well as the experiences and knowledge of many people here) and that you should drop everything and get good legal advice immediately.
The State made it pretty tough a few years ago to sit on EM and tie up a home sale. It basically reads:
Damages: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent within 7 days of receipt of the request will be liable to the other party for liquidated damages in the amount equal to the sum of:
1. Three times the amount of the earnest money and
2. The earnest money and
3. Reasonable attorney fees and
4. All costs of the lawsuit.
Pretty tough damages for not releasing the EM. Few Buyers will want to risk losing such a large chunk of money.
For the guy from the Oregon woods RE Agents in much of the west practice law...we just lie about it.
I have been on both sides of this thing a couple of times and pretty well understand the law in Nevada. I suspect much of the west is similar.
First off under $10,000 or so there is no rationale way to go formally to court. The legal fees will eat both sides and a loss is too catastrophic to risk. One can ask the escrow company to have the matter legally resolved...which they can...though generally at the cost of a high percentage of the EMD....got it? Guess who pays the lawyer for the escrow company who gets the matter resolved?
YOu can get a lawyer to write a letter for a reasonable sum but as you start talking about suits you suddenly run into $5,000 or $10,000 retainers. And generally they will not take these on as contingencies.
Some places the matter can be taken to mediation with the local realtor association. That is cheap and often effective. In the local case here it is not binding and the parties can then go to court.
Many of these cases can be taken to small claims court. That may be the best mechanism to resolve the dispute if the amount is within or close to the small claims limit. You just sue the Escrow Company, all the agents and brokerages and the other side. Then let the Judge sort it.
As to a hold on the house how in the world would an expired contract prevent selling? How would anyone know? There is no recorded document that would show a non terminated escrow. And any lawyer who filed a Lis Pendens under these circumstances is risking his own neck. The standard recovery for an inappropriate lis pendens is attorneys fees.
I am sure there are contracts somewhere with a cure period or some other strange clauses to provide some ongoing rights to a buyer. But I doubt any of them are very long and most could be dealt with without lawyering.
I have been in three or four deals over the years where a contract would not die but the house was sold out from under. In one case a Glendale Bank went into meltdown in the middle of a close. We finally resolved the financing 45 days or so after the contract expired. The contract was never extended but both sides intended to observe it if the seller could not find a better deal. Unfortunately the seller did so 43 days after the contract went into default. For those who ask why the contract was not extended it was because the seller demanded the commitment of the earnest money for any extension.
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.
