Buyer backed out after closing

[Darrell Kirby]

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

[Bob P.]

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

I think I misundersatnd. "After Closing" means that all monies have been transfered and the warranty deed and deed of trust or mortgage have been recorded. 

Do you mean that after the signing, he wouldn't send some money? That would be his issue with his lender.

You would have the option of forcing him to complete the deal, he then has to work out the problems between himself and his lender, that is none of your problem or business.

Have your attorney or the real estate agent's broker send a strongly worded letter as a warning about the consequences ( a lawsuit he is unlikely to win).

[Darrell Kirby]

Quote from @Bob P.:

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

I think I misundersatnd. "After Closing" means that all monies have been transfered and the warranty deed and deed of trust or mortgage have been recorded. 

Do you mean that after the signing, he wouldn't send some money? That would be his issue with his lender.

You would have the option of forcing him to complete the deal, he then has to work out the problems between himself and his lender, that is none of your problem or business.

Have your attorney or the real estate agent's broker send a strongly worded letter as a warning about the consequences ( a lawsuit he is unlikely to win).

 Thank you for the information. I had signed and he had signed. The wire transfer was occurring as he was out of state. He than stopped the transfer because he did not like the terms of his mortgage. The earnest monies were kept by my side. However, I am not happy over the fact that he seems to be just walking away after going through the process. My agent is from a reputable firm (KW). I plan on chatting with her to see why there was not much of a fight. 

[Theresa Harris]

Talk to your lawyer.  He signed the paperwork (as did you) and legally he's responsible for paying it.

[Darrell Kirby]

Quote from @Theresa Harris:

Talk to your lawyer.  He signed the paperwork (as did you) and legally he's responsible for paying it.

Thank you. I am looking into retaining a lawyer. 

[Russell Brazil]

Read your contract. Many standard contracts state that if you keep the deposit, you are relieving them of additional liability. 

[Kevin Sobilo]

@Darrell Kirby, the typical sales contract in my state would provide for 2 basic possibilities if a buyer didn't perform according to the contract.

1. The seller could simply retain the deposit. This is the commonly selected option on the contract and this of course is decided BEFORE the contract is signed.

2. The seller could go after (sue) the buyer for liquidated damages. For example, now incur 3 months of carrying costs and then have to sell for $20k less those extra costs are your damages that you could claim against the seller.

So, check your sales contract and speak to a good lawyer as well as your real estate agent if there is enough "damages" to be worth the hassle. 

[Theresa Harris]

Quote from @Darrell Kirby:

Quote from @Theresa Harris:

Talk to your lawyer.  He signed the paperwork (as did you) and legally he's responsible for paying it.

Thank you. I am looking into retaining a lawyer. 

 Who handled your closing?  I'm in Canada, but we go through a lawyer (or notary) when purchasing or selling a home.  That is who we sign all the documents with and handles all of the money (aside from collecting the deposit on the offer).

[Darrell Kirby]

Quote from @Kevin Sobilo:

@Darrell Kirby, the typical sales contract in my state would provide for 2 basic possibilities if a buyer didn't perform according to the contract.

1. The seller could simply retain the deposit. This is the commonly selected option on the contract and this of course is decided BEFORE the contract is signed.

2. The seller could go after (sue) the buyer for liquidated damages. For example, now incur 3 months of carrying costs and then have to sell for $20k less those extra costs are your damages that you could claim against the seller.

So, check your sales contract and speak to a good lawyer as well as your real estate agent if there is enough "damages" to be worth the hassle. 

 Thank you for that information Kevin. I have also heard that he never signed on his end. That changes things a little. 

[Darrell Kirby]

Quote from @Theresa Harris:

Quote from @Darrell Kirby:

Quote from @Theresa Harris:

Talk to your lawyer.  He signed the paperwork (as did you) and legally he's responsible for paying it.

Thank you. I am looking into retaining a lawyer. 

 Who handled your closing?  I'm in Canada, but we go through a lawyer (or notary) when purchasing or selling a home.  That is who we sign all the documents with and handles all of the money (aside from collecting the deposit on the offer).

Here in Michigan it was a Title company. The buyer was in New York but the Title company handled the process. He hand an agent that was handling most things here. 

[Chris Seveney]

@Darrell Kirby

Read the agreement - what is title company, their agent etc saying

also some states have a 3 day cooling off period on certain purchases which could be canceled during that time.

[Travis Biziorek]

Lots of folks here telling you your options but not really being fully honest with you.

The time, hassle, effort, money, etc. to sue for performance is likely not worth the hassle. I'd say this in any market, but we're talking about Detroit here. 

What's the purchase price on this? I'm guessing sub-$100k.

Retain the EMD and move would be my best advice.

[James Wise]

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

 It ain't closed till it's closed brother. He backed out before closing. Best way to avoid crap like this is to collect non refundable earnest money. Without that, your practical options are severely limited.

[Drew Sygit]

Agree with @Travis Biziorek

It's VERY expensive to sue someone in another state!

Attorney retainer fee will probably start at $10k.

Would it be worth it?

[Bob P.]

Quote from @Drew Sygit:

Agree with @Travis Biziorek

It's VERY expensive to sue someone in another state!

Attorney retainer fee will probably start at $10k.

Would it be worth it?

Actually the state that the property is in and contract is written in, is where you sue. So, to be sure, the other party would find it very expensive to defend the lawsuit. However, the OP said the buyer backed out before signing. "I have also heard that he never signed on his end."

That is a very tough one to litigate and win, and IMHO it's better to walk and find another buyer.

[Darrell Kirby]

Quote from @Bob P.:

Quote from @Drew Sygit:

Agree with @Travis Biziorek

It's VERY expensive to sue someone in another state!

Attorney retainer fee will probably start at $10k.

Would it be worth it?

Actually the state that the property is in and contract is written in, is where you sue. So, to be sure, the other party would find it very expensive to defend the lawsuit. However, the OP said the buyer backed out before signing. "I have also heard that he never signed on his end."

That is a very tough one to litigate and win, and IMHO it's better to walk and find another buyer.

 That is correct. I was told by my agent that he never actually signed on his end. I do have other offers so that is a good thing. 

[James Wise]

Quote from @Bob P.:

Quote from @Drew Sygit:

Agree with @Travis Biziorek

It's VERY expensive to sue someone in another state!

Attorney retainer fee will probably start at $10k.

Would it be worth it?

Actually the state that the property is in and contract is written in, is where you sue. So, to be sure, the other party would find it very expensive to defend the lawsuit. However, the OP said the buyer backed out before signing. "I have also heard that he never signed on his end."

That is a very tough one to litigate and win, and IMHO it's better to walk and find another buyer.

 Ya'll nuts bro. Travis & Drew are providing the only logical advice for the real world. I've sold over $200 million dollars worth of low value properties like this. Signed, didn't sign, it doesn't matter in the real world. If buyer doesn't wanna buy ain't really anything you can do about it. What the contract says is irrelevant because the cost to enforce is far to great. Only thing that really moves the needle in actual practice is NON REFUNDABLE EARNEST MONEY.

[Don Konipol]

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

Back when I was brokering commercial real estate 100 years ago I had a deal on a small office building fall through when during the walk thru just prior to closing the buyer insisted on checking the candy vending machine and verbally to;d us and sent us a follow up letter informing us that he wasn’t going to close because the Baby Ruth’s in the candy machine were stale. 

[James Wise]

Quote from @Don Konipol:

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

Back when I was brokering commercial real estate 100 years ago I had a deal on a small office building fall through when during the walk thru just prior to closing the buyer insisted on checking the candy vending machine and verbally to;d us and sent us a follow up letter informing us that he wasn’t going to close because the Baby Ruth’s in the candy machine were stale. 

lol, just another reason why Brokers / Sellers need to collect NON REFUNDABLE EMD. Craziest thing to me is all these turds out there that think a refundable deposit means anything. If it's refundable, what the hell is the point of bothering to collect it?

[Bob P.]

Quote from @James Wise:

Quote from @Don Konipol:

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

Back when I was brokering commercial real estate 100 years ago I had a deal on a small office building fall through when during the walk thru just prior to closing the buyer insisted on checking the candy vending machine and verbally to;d us and sent us a follow up letter informing us that he wasn’t going to close because the Baby Ruth’s in the candy machine were stale. 

lol, just another reason why Brokers / Sellers need to collect NON REFUNDABLE EMD. Craziest thing to me is all these turds out there that think a refundable deposit means anything. If it's refundable, what the hell is the point of bothering to collect it?

I just had an offer on a 5 bed 3 bath STR in N. Phoenix where the "buyer" in the "offer" demanded an immediate refund "at any time for any reason" and that I had to "remove the listing while he did his "due diligence".      Wha . .  

I said, "find some sand to pound".

[James Wise]

Quote from @Bob P.:

Quote from @James Wise:

Quote from @Don Konipol:

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

Back when I was brokering commercial real estate 100 years ago I had a deal on a small office building fall through when during the walk thru just prior to closing the buyer insisted on checking the candy vending machine and verbally to;d us and sent us a follow up letter informing us that he wasn’t going to close because the Baby Ruth’s in the candy machine were stale. 

lol, just another reason why Brokers / Sellers need to collect NON REFUNDABLE EMD. Craziest thing to me is all these turds out there that think a refundable deposit means anything. If it's refundable, what the hell is the point of bothering to collect it?

I just had an offer on a 5 bed 3 bath STR in N. Phoenix where the "buyer" in the "offer" demanded an immediate refund "at any time for any reason" and that I had to "remove the listing while he did his "due diligence".      Wha . .  

I said, "find some sand to pound".

 What a dong

[Don Konipol]

Quote from @Bob P.:

Quote from @James Wise:

Quote from @Don Konipol:

Quote from @Darrell Kirby:

I had a buyer back out after closing because he did not like his finance companies process. He stopped the wire transfer after the closing. Is there anything that can be done about this? 

Back when I was brokering commercial real estate 100 years ago I had a deal on a small office building fall through when during the walk thru just prior to closing the buyer insisted on checking the candy vending machine and verbally to;d us and sent us a follow up letter informing us that he wasn’t going to close because the Baby Ruth’s in the candy machine were stale. 

lol, just another reason why Brokers / Sellers need to collect NON REFUNDABLE EMD. Craziest thing to me is all these turds out there that think a refundable deposit means anything. If it's refundable, what the hell is the point of bothering to collect it?

I just had an offer on a 5 bed 3 bath STR in N. Phoenix where the "buyer" in the "offer" demanded an immediate refund "at any time for any reason" and that I had to "remove the listing while he did his "due diligence".      Wha . .  

I said, "find some sand to pound".

Might be more open and honest than trying to “sneak in” a “weasel” clause. Though that’s not really an offer, not even a Letter of Intent, more like a “ Letter of SOMEWHAT Interest” LOL