Hi all,
I need the professional to put on their legal hats here, as I have a situation where the buyer purchasing my condo cancelled 23 hours before the closing. Please note that I am the seller/owner and selling agent. Before you get the pitch forks to roast the buyer please read all the facts before automatically assuming I can keep the deposit. As every agent I talk to says I can keep it, but all my attorney friends are pumping the breaks on it. Need to build a real case and I hope I didn't write it to biased towards me. (Hard not too)
Condo location was North New Jersey:
Background.
- Buyer agreed to buy my condo 10/12/17 for $320,000 with 20% down, and went under contract on 10/16/17.
- Buyer works at the bank corporate office in an upper management position, and the mortgage was from that bank. (Note for later)
- All inspection requests and repairs were satisfied.
- Deposit of $20,000 was given to my attorney to hold in an escrow
- Appraisal came back for $310,000, and buyer's attorney contacted me saying they would give $305,000 and $10,000 cash on the side. My attorney sent a letter noting we would not sell it for less than $320,000 or we would put it back on the market. They agreed to pay the difference.
- Commitment letter was due 11/15/17, however my attorney did not request it since everything seemed to be moving in the right direction and they showed no red flags (failure on our part)
- Last email from buyer's attorney on 11/21/17 said "We are still on target for November 30th - finalizing with our lender."
- Closing was scheduled for 11/30/17 at 1:30pm, and I received a call the day before on 11/29/17 at 2:30pm from my attorney saying that their attorney just notified him saying they did not have the cash required for the closing.
- The attorney mentioned the buyer's sister was suppose to provide a gift but never did. (Should have been aged in the buyer's account already)
Cancellation email from buyer's attorney:
"Per our conversation, our client's loan is being denied by Bank *****. I will provide you with the denial letter as soon as received so that the deposit monies may be released.
We apologize for any inconvenience to the seller as this situation just happened yesterday. We have no issue with the seller immediately relisting the property.
Thank you for your understanding in this matter. "
Here is what the contract says:
Note we were past the 10 CALENDAR day mark.
Here is what the Rider says that removes the timeline:
After the deal was cancelled, their attorney requested the deposit to be returned, however I instructed my attorney not to return it. My attorney believes through the contract we are not eligible to keep it due to the timeliness factor, however, I believe it was canceled in bad faith.
Points circling around my head:
- The sister should have provided the gift amount within a reasonable time for the funds to clear.
- The bank should have identified that the amount of down payment was not available before the eve of the closing.
- This leads us to believe that towards the last week the buyer and her sister did not want to close on the condo if the only reason was that the gift was not available?
- It also, seems like they are not making any attempt to work out the deal in a different manner even if takes another week or two. Which shows they don't want it at all for other reasons then not being able to get the mortgage.
- If they put down $20,000 (6.25% of $320,000) already, she should have been qualified for a loan as that's higher then the FHA minimum of 3.5%.
- Buyer's LinkedIn career, typically has an average salaries of $200,000+. (I hate to assume, but I come from the same industry). Small loan compared to her salary.
- They agreed to 20% knowing they needed the cash the whole time. Especially after the lower appraisal.
- Essentially they were leading me on with no funds? That’s the one thing they can control to get out of buying the house.
- No other reason on the application except no cash.... which implies negligence of bad faith since they were stringing me along with no funds to back their contract.... they should never have went under contract unless they had funds. She had good credit, and was a valid candidate.
- The other agent at the time offered me 305k with “10 cash on the side” verbally. Showing no signs of a lack of cash.
- Anyone can get out of buying a house if they refuse to pay the rest of the down payment?
- if you bring it to court and the buyers talk about sibling arguments.... and then breaking the deal with each other.... l look like the victim paying the consequences...
- I feel like the buyer's agent is hounding me now bc he can’t find them another house unless they get the deposit back...
At the end of the day I just want $4,290.30 of the $20,000 deposit to cover the time it was off the market during October & November. Which I believe is very fair? I am not greedy...
What do you guys think?!?!?!?!?!
