Seller went MIA, how to proceed?

[Alex Martin]

I currently have 2 4-plexes under contract. My financing will not be finished until after our scheduled closing date so I went ahead and lined up a hard money lender just in case. Before I finalize with the hard money that I would require them I figured I'd reach out to the seller and just see if they would entertain an extension or if they are set on that closing date. So either way I have  my money all set and I'm good to go with either scenario. 

Now to the good part, the seller has been pretty flaky during much of the process so far; he tried to cancel the contract once after a week into it and after i threatened legal action he settled down and said he would honor the contract. I was worried how he'd react to the extension request but figured if i have other money available anyways I might as well try, conventional financing only is going to be far cheaper. So I had my realtor send out the extension request last Friday, as of today we've not heard anything back since then. He's gone totally radio silent and the closing date without extension is the 16. I'm obviously rooting for the extension but unsure how to proceed if he just never responds with anything. 

Any input on how to handle something like this and what occurs if he just doesn't respond to it? I feel that being so close to the closing date that him no responding should cause the closing date to be pushed back irregardless of whether an extension was signed or not. 

[Jacob Rhein]

A couple suggestions if you really want this property:

(1) Mail a letter to the seller at all known addresses (a) stating that you are ready, willing, and able to close, and (b) asking where the closing will take place. Include a copy of a clear to close from your lender or other proof of funds. Get a tracking number or postage certification for the letter and save a copy for your records.

(2) Notify the dual agent in writing that you intend to close. Save a copy for your records. 

(3) If there is a title company or attorney selected for the closing, contact them and try to schedule a closing for the 16th as the buyer (I have scheduled closings as a buyer before). Then send them a letter in writing confirming your closing date and/or attempt to schedule a closing.

(4) If the seller does not appear at the closing, don't stop working on your financing. You'll want financing ready in case you sue and end up getting a settlement that includes performance.

(5) If you end up needing to sue, your attorney should probably bring claims for specific performance AND breach of contract. Specific performance is an equitable remedy requiring the seller to give you the house, and requiring you to give the seller the agreed price. Breach of contract, on the other hand, is a legal remedy that results in a money judgement against the seller. The usual measure of damages is the difference between the purchase price and the fair market value. Let's say that you have a deal for $250k and the property will appraise at $310k. In that scenario, you could get a judgement for $60k. The threat of money damages is often way scarier to a seller than specific performance, and it can be used as leverage even if you what you really want is the property. As the plaintiff, you have the choice of which remedy you want.

Disclaimer: This post is for informational purposes only and is not intended as legal advice. I am not your lawyer. You should talk to a lawyer licensed in your jurisdiction for specific help with your situation.