Real Estate Q - Buyer Backs Out For No Reason *UPDATE*

[Murpheeee]

I am selling my house.

Accepted an offer on Wednesday. Both parties signed contract same day.
Went to Attorneys on Thursday morning.
Today buyer's attorney refused contract.

My realtor called buyers's relator and discovered reason was buyer's 99 year old mother (whom she lives with) talked her out of it.

Anything we can do about it?


UPDATE - 11/18/03

For anyone interested in the outcome to this fiasco.....read on.

The buyer's realtor provided me with a Release document for me to sign to release the buyer from the contract and return her $1500 deposit.

I spoke to my attorney who said that I could pursue it further, but it becomes a very messy and expensive (legal fees) litigation process, during which time I am still under contract and cannot accept any other offers on my house.

We cannot let this drag on as we have a contingent offer accepted on our new house and need to get ours sold. So as much as we would like to show this "buyer" that you cannot just walk away from a contract.....we had to let it slide. :|

 

[CPA]

Nope. Even if they put the earnest money down, they usually get 10 days to inspect the house and can back out for any reason.

 

[squirrel dog]

I dont think so , in my state(Louisiana) no. Just like buying a car you have three days to resind sale,for any reason.The worst thing that could happen to the buyer would be to lose his down payment to the respective Reality Co.'s.Of course different locales,diofferent laws.I would consult a (shudder) Lawyer.:disgust::evil::disgust:

 

[new2AMD]

Hey murph...
I have 2 real estate friends and 1 mortgage broker friend. Anything other than what you posted you want me to ask them?

 

[LunarRay]

Originally posted by: CPA
Nope. Even if they put the earnest money down, they usually get 10 days to inspect the house and can back out for any reason.

I don't agree. The 'cooling off period' does not relate to Real Property. So long as the terms of the contract do not provide for this 'backing out' I'd say the buyer is in breach . A contract is not voidable unless its terms provide for the condition. For instance, can't get financing. The Agent earns his commission as well. IMO

 

[Budmantom]

Technically you could keep their earnest money, realistically if you go to court you will lose because you will have to show what you have lost in the last few days.

Tom

 

[Vic]

2 very serious pieces of misinformation in this thread:

Yes, the buyer may back out at any time during the process but, if they don't have a valid reason that was particularly stated in the Purchase Agreement (i.e. condition of home, home failed inspection, appraisal came in low, ability to obtain financing), then the seller usually may keep the earnest money. There is no 3 or 10 day period. Consult your realtor and/or attorney though for details pertaining to your state. One point of fact, (although this is a little OT) there is NEVER a 3 day "right of rescission" on purchase money mortgage loans, that is ONLY for owner-occupied refinances. The instant the borrower signs all the loan documents for purchasing a house, the deal is done.

And there is no 3 day right of rescission for buyers on vehicle purchases either. I don't know why people always say this, but it is not true. Perhaps Louisiana may have a specific one, but if so, I've never heard of it and they are probably the only state that has that. In virtually all states, the instant you drive the car off the dealer's lot, it is yours, period, and you cannot return it unless the dealer (in rare instances I have seen) has their own "satisfaction guaranteed" clause. In fact, the opposite is usually true, where the dealer has 10 days to rescind the sale if financing is not obtained, but the buyer has no such rights. My reason for mentioning this is that many dishonest car salespeople try to trick people into a car by telling them they have a 3 day right to rescind. They don't.

 

[PanzerIV]

Good and timely info for myself as well. Thanks Vic.

 

[DBL]

Keep their deposit. Has your lawyer already deposited it in an escrow account?

 

[bernse]

My .02 (worth what you paid! )

If your lawyer is worth his salt, he'd be helping you out instead of an anonomys message board!

 

[rudder]

Originally posted by: Vic

And there is no 3 day right of rescission for buyers on vehicle purchases either. I don't know why people always say this, but it is not true.

People may get confused because you have three days to change your mind on contracts signed in your home. LIke if a salesman came to your house and sold you a water purification system. At least thats the way in tennessee.

 

[Murpheeee]

Originally posted by: bernse
My .02 (worth what you paid! )

If your lawyer is worth his salt, he'd be helping you out instead of an anonomys message board!

I am sure my lawyer will help, I am waiting on a call from them.

I posted here to see if someone had any actual knowledge of real estate law meantime

 

[Murpheeee]

Originally posted by: DBL
Keep their deposit. Has your lawyer already deposited it in an escrow account?

Yes we have $1500 in realtor's bank

 

[Murpheeee]

Originally posted by: new2AMD
Hey murph...
I have 2 real estate friends and 1 mortgage broker friend. Anything other than what you posted you want me to ask them?

Thanks for the offer, but I have already spoken to my realtor and am waiting for a call from my lawyer

Just thought I'd post here for some info meantime.

 

[cyclistca]

Well unless the contract has a clause covering 99 year old mothers I would say that your buyer is in breach of contract. I just bought a place and the rules were pretty straight where I live. There certainly was no cooling off period. A contract is a contract.

 

[JulesMaximus]

Originally posted by: squirrel dog
I dont think so , in my state(Louisiana) no. Just like buying a car you have three days to resind sale,for any reason.The worst thing that could happen to the buyer would be to lose his down payment to the respective Reality Co.'s.Of course different locales,diofferent laws.I would consult a (shudder) Lawyer.:disgust::evil::disgust:

No need to consult a lawyer. Talk to your real estate agent. He/She should know the laws.

 

[Murpheeee]

The buyer did not even want any inspections done and signed a waiver as part of the accepted offer, so that cannot be used as a way out.

As far as I know her Attorney just point blank rejected the contract, no reason given

 

[JulesMaximus]

Originally posted by: LunarRay

Originally posted by: CPA
Nope. Even if they put the earnest money down, they usually get 10 days to inspect the house and can back out for any reason.

I don't agree. The 'cooling off period' does not relate to Real Property. So long as the terms of the contract do not provide for this 'backing out' I'd say the buyer is in breach . A contract is not voidable unless its terms provide for the condition. For instance, can't get financing. The Agent earns his commission as well. IMO

You would be wrong. In California the buyer has 17 days to back out for any reason. My wife is a realtor.

 

[bernse]

Originally posted by: JulesMaximus

No need to consult a lawyer. Talk to your real estate agent. He/She should know the laws.[/quote]

I totally disagree. A real estate may know what the laws are, like how you know you shouldn't break the speed limit, but they are in no way, shape or form the people to take legal advice from.

 

[JulesMaximus]

Originally posted by: Vic
2 very serious pieces of misinformation in this thread:

Yes, the buyer may back out at any time during the process but, if they don't have a valid reason that was particularly stated in the Purchase Agreement (i.e. condition of home, home failed inspection, appraisal came in low, ability to obtain financing), then the seller usually may keep the earnest money. There is no 3 or 10 day period. Consult your realtor and/or attorney though for details pertaining to your state. One point of fact, (although this is a little OT) there is NEVER a 3 day "right of rescission" on purchase money mortgage loans, that is ONLY for owner-occupied refinances. The instant the borrower signs all the loan documents for purchasing a house, the deal is done.

And there is no 3 day right of rescission for buyers on vehicle purchases either. I don't know why people always say this, but it is not true. Perhaps Louisiana may have a specific one, but if so, I've never heard of it and they are probably the only state that has that. In virtually all states, the instant you drive the car off the dealer's lot, it is yours, period, and you cannot return it unless the dealer (in rare instances I have seen) has their own "satisfaction guaranteed" clause. In fact, the opposite is usually true, where the dealer has 10 days to rescind the sale if financing is not obtained, but the buyer has no such rights. My reason for mentioning this is that many dishonest car salespeople try to trick people into a car by telling them they have a 3 day right to rescind. They don't.

They didn't sign loan documents. He said they just signed the deal. Signing loan docs is done about a week before you close escrow.

Don't listen to half the BS you read here. Talk to your realtor. They should know the laws and be able to advise you what you can and cannot do.

 

[JulesMaximus]

Originally posted by: bernse

Originally posted by: JulesMaximus

No need to consult a lawyer. Talk to your real estate agent. He/She should know the laws.

I totally disagree. A real estate may know what the laws are, like how you know you shouldn't break the speed limit, but they are in no way, shape or form the people to take legal advice from.[/quote]

This is not a legal issue if the law states you can back out within a certain amount of time. He just may have to accept that fact and move on.

 

[Murpheeee]

Originally posted by: JulesMaximus

Originally posted by: bernse

Originally posted by: JulesMaximus

No need to consult a lawyer. Talk to your real estate agent. He/She should know the laws.

I totally disagree. A real estate may know what the laws are, like how you know you shouldn't break the speed limit, but they are in no way, shape or form the people to take legal advice from.

This is not a legal issue if the law states you can back out within a certain amount of time. He just may have to accept that fact and move on.[/quote]


It sounds like that varies by state, guess I'll find out for sure when I talk to my Attorney

 

[Vic]

Originally posted by: rudder

Originally posted by: VicAnd there is no 3 day right of rescission for buyers on vehicle purchases either. I don't know why people always say this, but it is not true.

People may get confused because you have three days to change your mind on contracts signed in your home. LIke if a salesman came to your house and sold you a water purification system. At least thats the way in tennessee.

This is correct.

To my knowledge, there are only 2 instances where the 3 day right of rescission applies. Owner-occupied home mortgage refinances (including subordinate financing, like 2nd mortgages and HELOCs) and instances where a salespeople came to your house and sold you a product inside your house (like encyclopedias, magazine subscriptions, vacuum cleaners, etc.).
Voluntarily going to a car dealership and buying a car from them never applies. After you buy the car and drive it off the lot, you may have Lemon Law rights but never buyer's remorse rights.

And PanzerIV, you're most certainly welcome. I try to do what I can to make sure people are properly educated against the constant stream of financial misinformation that is out there. This issue with car buying is a particular pet-peeve of mine right now because someone I know was tricked this past summer into buying a car they couldn't afford by Beaverton Honda, because they were told they had a 3 day right and that they could just drive the car home to see if they liked it. They tried to return the next day and of course they couldn't.

Caveat Emptor but I believe that begins with people being properly educated in the first place.

And Murpheeee, keep that earnest money if you can (and you should be able to). Nothing I hate more than know-nothing relatives killing a perfectly good deal...

 

[JulesMaximus]

Yes, it will vary by state. You generally don't have attorneys involved in real estate transactions (not for personal property anyway). Your realtor should know what the laws are in this respect though. This is pretty clear cut and not subject to legal battling in the courts. At least not in CA.

I just got off the phone with my wife and this is law in CA. 17 days, buyer can back out for ANY reason or NO reason at all. If your realtor doesn't know the laws they shouldn't be selling real estate.

 

[bernse]

Originally posted by: JulesMaximus
This is not a legal issue if the law states you can back out within a certain amount of time. He just may have to accept that fact and move on.

Even so, it would still be very unwise to take the word of a real estate agent that is looking out for their best interests.

"Yeah. Let it go. Lookee here! Here is another prospective purchaser! Let's get this one. It'll be less work for me!"