The buyer is the main problem…they chose not to pursue other financing until a week prior to the closing date. They have refused to sign a request our realtor sent for additional earnest money if we couldn’t close on time. Now tonight their new mortgage broker asked for an extension without declaring if they are even approved…
Ugh. @Cymru what are you going to do?
I think I’d hold firm on the closing deadline and let the deal fall apart. Or give max 3 days extension. It’s a hot market still, you can find another buyer, and these guys have proven themselves to be an untrustworthy and/or incompetent counterparty. But, I know that’s WAY easier said from here, sitting in my chair behind my keyboard.
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Is this something that seems to be common? Good grief. I ask because my boarding barn is for sale. The first offer ended up falling thru because ‘financing wasn’t in place’. The second one was a cash offer, went all the way to inspection when the out of state buyers showed up to actually view the place in person and then pulled out.
Realtor told my BO “this is what people are doing”. Putting in a hard offer, getting it accepted, then finding some last minute way to weasel out from under it - not a glaring obvious reason - they are just tying up the property so nobody else can make an offer, then backing out.
I find this very hard to swallow, pretty crappy behavior on the part of buyers, and even crappier on the realtors for not vetting their clientele more thoroughly.
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they can ask But you do not need to agree… the request for addition earnest funds is necessary to bind the extension otherwise there is no contract for the extension
Most contracts only need to contain two elements to be legally valid: All parties must be in agreement (after an offer has been made by one party and accepted by the other). Something of value must be exchanged – such as cash, services, or goods (or a promise to exchange such an item) – for something else of value.
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IME they do not have to provide additional EM; the extension is an additional chapter of the existing contract and they have already provided the EM for that. Seller can request additional EM but they don’t have to agree to it. When all parties agree and sign, the existing contract now includes the change.
It’s unclear to me what stage the buyers are in with the new lender; did they just email Quicken last night or have they submitted documents. It’s a wonky time in real estate, it’s possible that the new lender actually can do this with them and legit needs the time to process it. It’s at the last freaking minute but it could work and you could come away with a delay of a couple of weeks instead of going back to market. Who is the new lender; the major lenders are slllooowww IME but local lenders have been faster.
I’ve worked in real estate and I’ve been the seller. As a seller, this frustration and confusion would have me wanting to walk away from all involved. As a RE person, I’ve seen so many deals appear to come unraveled but then get put back together again and proceed to closing. I don’t know enough about the OP’s situation to know which way this one should go. If the market or property isn’t on fire hot, this buyer in the hand might be worth peddling along for a few more days.
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it is an amendment
Yes, exactly.
We have been pretty much left in the dark but from what we can decipher, the buyer’s realtor has a local mortgage company that is owned by their real estate company…so a little kick back $ to the realtor for convincing her buyers to drop their original loan and go with hers. Apparently this process started two days ago. Now the demands are coming from this new mortgage person, not their realtor. Her email last night requested an additional 30 days, and “no seller credit”. Whatever that means.
I’d be telling my realtor that I need EVERYTHING in black & white & clearly spelled out, with absolutely ZERO confusion.
Before I’d even think about moving forward.
Have you contacted a real estate lawyer yet?
I’d be curious to see what they have to say.
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Having “no seller credit” would mean you aren’t offering the buyer any type of credit at closing. It is usually used to make a buyer more enticed to buy your home if it is a buyer’s market (which it is not right now). A common scenario would be there is something that needs fixed, ie: the roof, and the seller would provide x amount of $ for the buyer to get it fixed on their own instead of the buyer fixing it as a condition of the sale. Depends on what you want, but the buyer getting money is of interest as they can choose whom to work with and monitor that the work is done the way they want. Those are just a couple examples, there are others… but they aren’t asking you for any of those based on what the new mortgage person told you. I’d be incredibly annoyed with this hold up, especially if you KNOW there is a market for your property and you could easily get another buyer.
We would just like to complete this sale and be done with it. By the time we fire this realtor and get another one and get marketing done another month will pass. Our realtor in Montana, where we are moving, has pretty much taken over here representing us. She has talked with the buyers mortgage broker and has pushed things along so we are hoping to close in 3 weeks. I hate paying this worthless realtor here the commission but don’t think there is any way around it.
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I would never carry the financing for anyone. Let alone for someone who bailed on 4.99% to get a lower rate. Lawyer up right now. Something shady is going on with the proposal for early closing, followed by the issues with the loan, and the delay in financing. I wonder if they found another property they want instead? Or if their realtor/mortgage person told the buyers that you have to sell, and delaying will get them a lower price?
I had a friend who was a part time realtor, but his wife was full time, and in my opinion the best one in town. I asked the husband why buyers disappear (this happened to my next door neighbor, signed contract, great credit, mortgage preapproved, and everything was going nicely). Then their buyer just disappeared. They kept the earnest money, but still had to put house back on market, and cancel their plans for moving.
Sam told me that often the people sign the contract, have the financing, but then go on vacation, buy an expensive vehicle or two, or buy a lot of furniture, etc., and when the mortgage company runs their numbers again, they don’t qualify. He also said sometimes they see another property they want more, so they go for that one instead, and abandon their earnest money. Or though the buyer is preapproved, when the mortgage lender runs all of their information they find out some reason that the buyers don’t qualify.
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@Cymru have you contacted a lawyer yet? I hope so!
It is great that the other realtor is standing up for you. Are they legally allowed to do that in your state? (Are they licensed per state or is it a national license?)
Agent in Seattle WA here. I cannot get a kick back for referring a lender. That’s illegal. Sounds like crappy buyers. You can either extend or tell them to kick rocks. You would only keep their 5 grand if they weren’t actually denied financing. I personally would ask them to release their deposit before I would sign an extension. 21 day close should be easy for a good lender. Guessing they know they have the upper hand since you are under contract on a new home. People are just jerks sometimes. Sorry this has gone sideways.
@LovesHorses, why is being denied financing the only way to keep the earnest money. What if the buyer simply does not like the financing they are able to get? The seller can’t keep the earnest money when things fall apart?
was the purchase conditional with financing?
No it wasn’t contingent on financing. That’s why our realtor pushed us into accepting the offer. It wasn’t contingent on financing or appraisal. Now we are waiting on an appraisal and somewhat concerned because everything is selling above appraisal. So we sent them an amendment stating if the appraisal came in lower than selling price the buyers have to pay the difference and we are not required to accept less than selling price. They have til noon tomorrow to sign and if they don’t we are firing our realtor and getting a new one. I am waiting to see what happens before filing a complaint her broker and the State board of Realtors. Our desire is to just wrap this up then go after the realtor for negligence.
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you may want to pursue this regardless…
