Default By Buyer.
Two months ago my husband and I found buyers for our home in Florida. (FSBO) We set a closing date for Nov 7th and signed a contract . A few days later the buyers called and asked us to push closing back 1 week. We agreed. The new closing date was set for the 14th of Nov. On the bottom of the contract the buyer added a handwritten addendum that says: Buyer has the right to cancel contract and receive deposit refund if agreement is not closed by Nov.14, 2003. Nov.14th came and went. We have not closed this deal yet. We have now run into a small problem. My title agency is saying that the buyers folder is incomplete. We are still waiting for some documents to close. Everyday for the past week a new problem arises. We have set 3 verbal closing dates and the buyers have backed out each time. Is this contract still valid? We have invested alot money in this deal. I have been forced to cancel my rental home losing well over a thousand dollars. Not to mention a downpayment that I applied to my new home construction. I typed up another addendum and delivered it to them giving them till this Fri. Nov 23rd to close. I doubt this is going to happen because they went out of town today. Does anyone have any advice for me. [ Edited by GoodDay2U on Date 11/20/2003 ]
they have the right to get their downpayment back since the closing date has come and gone, and you have no recourse....i think you need to draw up an addendum , that time is of the essence on the new closing date (give them another 30days)and if they dont close by that date then they will lose their downpayment...if they are serious about your house then they will sign the addendum ...if they are unwilling then move on...you cant squeeze blood out of a stone.
The buyer is not liable for the things you did because you thought you had the house sold. Like posted above find out if they are still serious and if not try to sell to another buyer. In a hotter market this would be easier but in a buyers market you got to wait. Try to find the problem and correct it and close the deal.
Hope this helps some
Ted Jr
One more question... If seller was in breach of contract... seller could be sued for damages. How come it's not as easy for seller to sue buyer for breching contract? I have bent over backwards for these people... I tried my best to work this out with them...I offered an extension and nothing seems to make them happy. I'm at the end of my ropes and I'm thinking about contacting an attorney. Would this be a waste of my time? [ Edited by GoodDay2U on Date 11/20/2003 ]
How come it's not as easy for seller to sue buyer for breching contract?
A lot different situation from forcing a S to sell...there, that is the ONLY property in the world like that one...since all RE is unique, courts tend to force S to sell if there is clearcut contract and breach thereof.
With a B, courts are not so rigid, feeling that there are infinite # of B's out there.
Eat your losses & frustration and move forward. Not worth chasing that elusive fish...but next time do put some better barbs on your hook.
Unless you can prove that your buyer did not act in good faith in his/her/their attempt to purchase the property, you may be out of luck. I agree with JohnMerchant to cut your losses and move on. With your next prospective purchaser you might want to ask that he/she/they provide copy of a prequalification letter or proof of funds before you tie up the property. Incidentally, what part of Fla. is the property locate?
Hi Goodday2U
There are a lot of people who make offers on properties with the intention of selling there contract to another investor. If they are unsucessful they just don't close. The two strategies to use to avoid this is to make sure there Earnest money is not contingent on anything such as financing or inspections etc. The second strategy is to ask them if they are buying the property for themselves and how many properties they have bought. If they have bought just a couple or less you need to be very involved in the complete process and have time limits for loan approval. Talk with the lender, make the seller approve this.
I would immediatly start selling this property again. I would send a notice of termination to the buyer. If he is still interested he will let you know. If he is, I would then find out what the real problem is. If you have an agent, let him do this. He will know the right questions to ask.
Hi Goodday2U
There are a lot of people who make offers on properties with the intention of selling there contract to another investor. If they are unsucessful they just don't close. The two strategies to use to avoid this is to make sure there Earnest money is not contingent on anything such as financing or inspections etc. The second strategy is to ask them if they are buying the property for themselves and how many properties they have bought. If they have bought just a couple or less you need to be very involved in the complete process and have time limits for loan approval. Talk with the lender, make the seller approve this.
I would immediatly start selling this property again. I would send a notice of termination to the buyer. If he is still interested he will let you know. If he is, I would then find out what the real problem is. If you have an agent, let him do this. He will know the right questions to ask.
"A few days later the buyers called and asked us to push closing back 1 week. We agreed. The new closing date was set for the 14th of Nov. On the bottom of the contract the buyer added a handwritten addendum that says: Buyer has the right to cancel contract and receive deposit refund if agreement is not closed by Nov.14, 2003"
Did you do this contract on your own or did you have an agent? If you had an agent, they should have advised you better. Next time (cause it's probably too late now)...avoid verbal agreements. Get everything in writing, and put some teeth into any changes made. For example, when you agreed to change the closing date, you could have stipulated that if the buyer failed to close on the new date, you would keep the deposit. That would have made them either step up to the plate or back down. You would have known sooner what their true intent was.
As for suing...on what basis would you sue? You signed the contract with the addendum, so they were within their rights to back out.
Thank you all for your replies. I found out today the buyer had a previous BK. He had to file a motion to buy my home. That's why the closing has been delayed. Jorge, to answer your question...the property is in Orlando.[ Edited by GoodDay2U on Date 11/21/2003 ]
Good luck with the sale. Keep us posted if they are any snags. J