Revisited: First "Flip?" Gone Bad
So, Pam calls me today crying and now says that she has changed her mind, she doesn't want to buy the house....mind you she has already signed the purchase agreement with the seller (my name got signed off the purchase agreement and the assignment was thrown out). The buyer's agent we had, basically had the attitude that "oh well mzmitchell won't get her fee but i'll still get my fee", that really made Pam mad. But I stuck with Pam even though I wasn't getting paid anything out of the deal to try to see her through this mess....the house had a city violation inspection completed, the seller agreed to fix a few things, and Pam signed agreeing that she'd be responsible for the rest. Her biggest concern was the cracked driveway that was very unsightly patched up, but it didn't make it as a violation. But her family and friends got her scared into thinking that once she bought the house that the city would be on her about getting that driveway fixed (estimated repairs $7,000-$8,000)....plus the loan officer has now told her that she'll need more money at closing than was previously discussed.....so all of this plus after what happened with the big mess the bank took me through, Pam is highly upset and is determined that she is going to get out of this deal one way or another.....oh, also the loan officer told her that she can't use a down payment assistance program because its too late (closing is dec. 19th) - I thought she could still use a down pymt program, but oh well..the bank seems to know it all!!
my question is, legally, how could she get out of the deal if she has signed the purchase agreement and is due to close on dec. 19th?????? Please advise, I'd hate to see her go through anymore "drama"!
Thanks (hopefully my original post is still on this site somewhere....!)
mzmitchell <IMG SRC="images/forum/smilies/icon_confused.gif">[ Edited by mzmitchell on Date 11/29/2003 ]
Buyers can forfeit on anything....
Financing would be the one I'd guess she'd use. If the financing does not meet buyer approval....
Move on, you would never see the earnest money anyway....
oh yeah, I forgot to mention that..Pam gave the buyer's agent a certified check of $1,000 for earnest money....will she be able to get this back I'm wondering? We know definitely her $295 loan application fee is non-refundable but we're uncertain about the earnest money....and for whatever reason, the buyer's agent hasn't returned her calls yet....thanks for any input!!
There should be a number of escape clauses that Pam can use. I can't think of any off the top of my head, so I can't be much help except to say that they do exist. Uhhh, wait, what about the inspection? Unless it was waived, which is unlikely, the contract would be contingent on a satisfactory inspection report, right? Well, find a reason to make it unsatisfactory. Also, like the previous post said, the contract should be contingent on the buyer obtaining financing. There are probably others. It shouldn't be hard to get out. Z
I've got Pam on the line now, she just spoke with the buyer's agent, who says that Pam most likely won't get her $1,000 earnest money back and advised her to now get an attorney.....this is too much drama!!!!!
No it's not. If you want drama, read some of MY posts! Z
mzmitchell
when does Pam's mortgage contingency expire? Did she use any escape clauses like:
1) subject to getting financed for a certain rate and a certain program and down payment.
2) subject to satisfactory inspection by buyer
3) subject to attorneys approval
etc, etc....
If her mortgage contingency has not expired, she may still have a loop hole somewhere's. Have her speak to an attorney about the contract.
I have a list of clauses I can email you for future deals.
hi robert,
thanks for responding. (please do email me those clauses-thanks).
Pam's contract says: If BUYER'S loan application is neither approved nor denied within 21 days after the date of Acceptance, then BUYER may either request a written extension or remove this contingency in writing.
mzmitchell,
If buyer cannot get financing there is no way she can purchase so it may be an out
She may lose deposit. It will probably go to arbitration if a realtor is involved and she may get her deposit back , minus some fees and thatt could take several weeks [4 months in a case I was involved in}
The best thing is if the seller will consent to the buyer getting her money back and putting the property back on the market It would be better in the seller eyes if that were the only reason she needed the money back , unless you have another out with the inspections but that time frame has probably passed
An attorney would be a good idea[ Edited by LynLinz on Date 11/30/2003 ]