Could you all meet? Get the real story?

Oh minet, I have my fingers crossed so tight for you that this can still happen. I truly hope your buyers want the house, and things get fixed quickly so you can close.

We had to do the same thing. A few days before close, all of a sudden there was a big problem with buyer's financing. We immediately put our house back on the market listing it as active. The agent's instructions had the info about a pending contract. We did NOT get their earnest money, because they wouldn't sign off on the financing contingency. Their realtor kept sugar coating things until everything just imploded.

Does your contract specify what kind of rate cap your buyer has to still be held to the contract? If they somehow try to wiggle out through their financing contingency, I would do everything you can to make them prove they cannot get financing (if that is possible). If they are not doing things in a timely manner, serve them the specific notice to perform.

Believe me, I wish we had been much more aggressive with our first buyer and that contract and gotten lawyers involved. We were totally taken advantage of because we are nice people. I will never let emotions/sympathy get in the way of a business transaction again, because it has cost us dearly monetarily. Sorry to bring all my personal house saga to your post, but I just want to encourage you to hold onto and enforce this contract in any way possible!

Good luck, try and focus on getting packed up, and I hope things clear up for you very soon.

I agree with teelag, get a lawyer involved. R.E. agents are good when everything goes right, but you need a lawyer to show you are serious and will not just let the buyer walk off. Find out from the lawyer how to get the house sold or get the earnest money.

How long have you been under contract? When we sold in SoCal last winter, the buyers had 14 (or was it 17?) days to remove contingencies. Did your realtor allow them to go beyond the standard time without enforcing specific performance? We were waiting for all contingencies to be removed before we put an offer on a house (same situation DH at new job, new location). Our realtor made certain everything was done within the specified time frame. Hope this all works out for you.

But, this is what I don't understand. If there was a credit glitch that needed to be addressed, why did the mortgage company produce loan documents - the credit glitch should have been found and addressed during the due diligence period before a loan commitment is made.

I don't know if the loan docs have actually been drawn up. That's what we thought the hold up was, but their agent isn't telling ours anything and when our agent calls the other agent gets angry.

I don't remember anything in the contract being tied to the buyer getting a specific loan interest rate. There was a paper provided by them which said they already had a 4.14% loan set up with World Savings so we thought all that had been addressed.

Our first contract back in August was abandoned by a different buyer and we didn't get the earnest money then. I don't think our realtor is aggressive in pursuing that, and I don't know enough to argue the points. If this one falls through we'll consult an attorney.

I don't want to just recoup the earnest money - I want the house sale to go through. Can we force that?

For now I'm just doing the "wait and see" I guess. Our realtor says they have until Nov 15 to sign the papers. He says we'll just put it back on the market but it's not his life that's being all discombombulated.

If it really is just a mistake in the credit report, then a letter of explanation from the buyers will most likely take care of the problem. I suspect they have until November 15 to sign the papers because that is when their rate lock expires.

In your contract, is there a date for the loan commitment to be issued? I think it's up to your agent to monitor that date closely by requesting a copy of the commitment.

Minet, your painful exerience shows how important it is to get a real estate lawyer if you are buying or selling a house. For some reason, people think realtors can help them when buyers refuse to honor a contract. They can't.

Years ago, I had buyers back out of a contract to buy my house. The realtor urged me to return the earnest money and move on. I hired a lawyer and had him inform the buyers that they could either return the earnest money or face a lawsuit. I made it clear to all concerned that I was prepared to wait a long time to sell my house, but that I would have the earnest money back. The buyers returned the cash.

I would ask (tell)demand etc that your realtor and broker respond wthing 24 hours what is going on or a attorney will be contacted. If the other agent refuses to cooperate, let her/his broker know a attorney is drawing up papers now. DO NOT let these people play games with you. Sounds like the buyers want out without releasing any money. Tell your agent NOV 15, is not accectable. BE firm. Tell them the house is sold and you expect all papers to be sighned 11/14/06. Sounds like your agent knows more that she/he is telling you trying to get you to put the house back on the market. Get a new agent!

The return or non-return of the deposit ($2,000), as well as whether the buyers can claim to be off the hook, is governed by what it says in the contract that everyone signed. I would try not to threaten the buyers until I had the full and complete story from their realtor, which it's up to your realtor to get! He needs on Monday morning first thing to find out what the buyers intentions are. Perhaps they still are trying to close on Wednesday and can't get their loan until the credit issue is cleared up. You may need an attorney but first you need to get the whole true story so you know what to do.

In the sales contract close of escrow is written as Nov 15, so I think I have to wait until then to make any demands. If they don't close, then I'll call an attorney.

My preference for this situation is for the sale to go through. I don't want to do anything to antagonize the buyers or their agent. If they can fix their credit (if that's the real problem) then great.

Yes, jerzeegirl, that's my understanding of it. Their agent tells mine (when he'll take my agent's calls) that they are trying to fix their credit and it will still go through. Whether that's the whole, true story though is anybody's guess.

And Monday is a banking holiday, so that's a problem too.

FYI--Car loans are frequently a source of last minute issues when it comes to closing. According to both a title company employee and a mortgage broker I work with frequently, it's probably one of the top 5 reasons a closing doesn't happen on time. For some reason some of the companies that loan for cars are pretty slow to show a loan as paid off. One of my own clients, with excellent credit and 1/3 down on a very expensive home, just went through the same issue after the lender had told me several times that all was in order.

Not knowing how contracts are written in CA, I'm going to give you some advice as to what I would insist on for my sellers if the escrow doesn't close on the 15th---I would amend the contract putting in a new closing date, no more than a week, and demand that they sign off on all contingencies. This is only if you receive some concrete answers as to what the issue is, what the solution is, and when it will be resolved. At this point in time it might be better to give them a few more days if you get the answers you need. (By the way, lenders also must keep financial info confidential unless expressly permitted to share the info.)

Regarding the release of the contingencies--I don't know how it works there, but here the buyer has a deadline(s) for removing those. If he fails to exercise this contingency before the deadline, he forfeits his right to use it as an excuse for not performing the the terms of the contract. Unless he uses one of those contingencies to not close, he loses the earnest money.

Friday was the holiday here not Monday. I think Waitng until 11/15 will be too late, I wld consult someone now. No one can force the buyer to buy, they can only be liable for damages which are probably stated in your contract as the amount of the earnest money or deposit

I hope you're right about Monday not being a holiday. I looked at the Post Office website and it's not for them, so maybe the banks are open too.

Why do you think waiting until the 15th is too late? That's just a couple of days and I'd like to give them the chance to fix their credit if then the sale will go through.

Wouldn't an attorney just tell me that the contract says escrow should close on Nov 15 and wait until then? What can he do before then?

I guess our house is officially back on the market - a realtor with an MLS sheet in her hands came by this afternoon to show it.

I think your realtor knows more than he's telling you. Even if he doesn't, it's up to the other realtor to let your agent know what's happening. It's great your house is back on the market again, but to me it seems like the realtor knows something is going to crash on the deal.

I still don't understand why contingencies weren't signed off upon throughout the escrow process. You mentioned that you may not get the earnest money because they didn't sign off on that? I'm confused about that situation because we had to give the earnest money as a condition of the contract. If that wasn't signed off, then your realtor really dropped the bucket.

A real estate attorney can lay out for you all options within the law which could have the result of the closing happening on the 15th. The same attorney most likely will find out what's going on when you can't. And a real estate attorney may also suggest options for what legal recourse you have if the closing doesn't happen or strategies to take.

Why are you so unwilling to call? Is it the cost of a couple of hours legal work? If it was me, spending money on professional advice is money will spent if it means I'll get thousands of dollars at the contractually agreed date.

Some of you are saying get the attorney now, some are saying wait. I don't know which way to go. My DH thinks we should wait.

I don't know if I have physically have the time to deal with an attorney now. Because of a recent severe illness which I'm still recovering from, I'm way behind in my packing and still have doctor's appointments etc to deal with. DH will be flying in Monday night so he'll be help then. We could delay our move until Friday but no later.

My thinking is that if the house doesn't close on the 15th then we could handle it all via phone/email/fax with an attorney here (we're moving out of state).
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My question back to you all: Why would my Realtor not have advised us to call an attorney on the previous buyer backout or in this new situation? I've never heard an agent suggest talking to an attorney. Why not? He doesn't get paid until the house sells so it would be in his interest too.

In my experience of buying/selling 5 houses in 3 different states, I've had both realtors and attorneys tell me the following - Realtors say that attorneys get in the way as the attorneys try to get too picky, attorneys say realtors don't know what they are doing when it comes to matters requiring legal advice. I would say that your agent didn't advise you to speak to an attorney because 1)your realtor may never have had a tough closing; 2)your realtor doesn't want any attorney to give you advice that would complicate the closing or 3)something else.

I recognize that it's a tough time for you now. We had a buyer change their mind about buying our house 2 days before closing and we phoned our attorney, had about one hr of phone calls total in the next two days, got the advice we needed and he wrote some letters and had phone calls on our behalf. The closing never happened but we were able to reach a resolution that we were 110% satisfied with. To this day, I've never met that attorney.
If it was me, I wouldn't wait.

I'm with those who say to contact a RE attorney.

Just speaking to one might be all you need to wake up your agent to the fact that she should have covered you with the guarantee of the earnest money in the event that the buyer did back out.

My question back to you all: Why would my Realtor not have advised us to call an attorney on the previous buyer backout or in this new situation? I've never heard an agent suggest talking to an attorney. Why not? He doesn't get paid until the house sells so it would be in his interest too.

When I had a question about closing when selling our home I asked my real estate agent. His immediate response was, Let's let the attorneys handle that. That's what they get paid for.

It's is not prudent to do any real estate transaction (no matter how customary) IMO without a good real estate attorney. Contact one Monday.

There are some states where it is customary to use an attorney and some states where it isn't. For example, in Nothern NJ attorneys are used; in Southern NJ the custom is to use title companies. Of course, if there is trouble, you might need to get an attorney no matter where you are.

I honestly can't blame the buyers for not wanting to sign off on the contingencies if they are worried that their credit might prevent them from purchasing the home. After all, if they can't get the mortgage, they most likely will not be able to buy the house. You can't force them to buy the house if they can't get the financing for it. And if the contract is conditioned on them getting financing, and they can't perform, isn't it likely that their deposit will be refunded to them regardless?

Honestly, the thing that worries me is that your realtor suggested that you put the house back on the market. Somebody above mentioned that your realtor might know more than he is saying and that was also my thought. Which is why you need to demand answers from him. Ask him if it's time to call an attorney; Ask him for his interpretation of the contract. Ask him what should happen next vis a vis the buyers. Ask your realtor to get permission from the buyer's realtor to talk to the loan company directly. Maybe your realtor's Manager should get involved at this point.

Our realtor said he wanted to put the house back on the market for 2 reasons: 1) to show the buyers that we didn't want to play games anymore and 2) so that we wouldn't lose a valuable weekend of possible showings.

I don't know if he's playing straight with us or not. He's part of a large firm with who knows how many realtors under the broker. I do know I've been to their office twice and it's in a very pricey new building in a pricey part of the county with many many mail slots for realtors and a lot of front-counter people. Long marble-floored corridors with private offices for each realtor. I don't think it's the kind of place where the broker would sit down with our realtor and say, "Gee, are you being fair to these folks?"

This realtor sold us our house 4.5 years ago and he's changed brokers twice in that time. I don't think he's as hungry for business as he used to be.

I'll call an attorney on Monday just so I know where I stand.

I'm sure that the reason minet's agent didn't suggest an attorney is because minet is in California, where attorneys are rarely used for real estate purchases.

Reason Broker did not suggest attorney may be regional (here no one buys without an attorney) or because your attorney may say the broker screwed up in some way, but I am just wondering, have no idea

Minet, I don't really have any advice, but I just wanted to say that I am SO SORRY this is happening and I hope it's all resolved (in your favor) SOON!!! I know that if all the contingencies were removed and THEN the buyers changed their minds (or whatever) you could sue them for specific performance and demand that they fulfill the contract. But if they can't get the financing??? Hopefully it IS just a glitch or a clerical error.

:::crossing fingers for you:::

Update: just got back from the dr and was going to call an attorney this afternoon. Checked email and there was a note from the realtor, forwarded from the escrow company, that said the other agent had called and the loan docs should be sent over to escrow today.

So, I guess I'm back to the wait and see mode. If there's another glitch, I'll call the attorney.

I think the next time I buy or sell I'll use an attorney from the start. I may not understand all the implications of the contracts and contingencies and such - easier to let a disinterested party look things over and tell me if they're good to go. Just for peace of mind, especially since I'll be in a different state and the regulations/customs may be different.

Good news, all systems go!!! What a stress relief that email must have been....congrats

Update: just got back from the dr and was going to call an attorney this afternoon. Checked email and there was a note from the realtor, forwarded from the escrow company, that said the other agent had called and the loan docs should be sent over to escrow today.

So, I guess I'm back to the wait and see mode. If there's another glitch, I'll call the attorney.

I think the next time I buy or sell I'll use an attorney from the start. I may not understand all the implications of the contracts and contingencies and such - easier to let a disinterested party look things over and tell me if they're good to go. Just for peace of mind, especially since I'll be in a different state and the regulations/customs may be different.

Hey, how did that double post appear? And after someone else's reply ... seems that there are glitches everywhere.

qdognj - thanks for the congrats, but I'm not ready to celebrate yet. When I get word that the escrow company actually has the docs and that they are a-ok and the money is being wired to my bank - that's when I throw the confetti!

Holding my breath for you!
Kathy G in MI

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