the buyer asked for renegotiation, and time to rework the mortgage, now the seller wants to sue
2007-02-23
22:19:44
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6 answers
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asked by
bjcchicago
1
in
Business & Finance
➔ Renting & Real Estate
the seller is a sale by owner, the final mortgage was sent to the closing without consent of the terms, which were changed to increase money at closing to almost 10,000 more, the buyer threatens to sue and will not renegotiate
2007-02-23
23:20:44 ·
update #1
Generally, there should be a clause in the sales contract that says
"contingent upon financing being accepted"
Which would mean that if financing fell through, then its not the buyer's fault and the seller has no recourse.
If the loan company changes the terms of the financing, the buyer is NOT obligated to accept that change. The original sales negotiation was based on the original financing.
If the BUYER requested the change... the buyer could be in trouble.
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If the contingency clause was left out of the contract... the buyer IS in trouble
the Realtor representing the buyer should have made sure the clause was there.
You DID use a Realtor other than the one representing the seller didn't you?
2007-02-23 22:27:59
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answer #1
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answered by Anonymous
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Your question is contradicting itself..please clarify. In one sentence you said the seller wants to sue, in the other the buyer wants to sue.
In Illinois we have a contract that states the terms of the mortgage the buyer is attempting to secure. It also allows for other means of securing a mortgage, including the seller being able to provide a mortgage if the buyer can not, but the attorney
should have addressed any changes made to the contract.
It appears the buyer is looking for help with the down payment, closing costs or something by wanting the $10,000 extra. He can not go in for a loan for a price that isn't reflected on the contract. The price ont he contract can not be altered unless agreed by all parties. They agreed in writing on a certain price, the appraisal was probably completed and if the buyer needed more money, his attorney should have cancelled the original contract and requested that a new contract be negotiated for the additional 10,000. Now the poor seller is a few days from closing and most likely moved out or set up his move and he isgoing to be out expenses..days off work, movers, another months mortgage, etc. I'd be upset too!
The mortgage clause clearly has a date in which the buyer has to obtain financing. If that date isn't met and no extenstions were granted, and the contract wasn't cancelled, then most Illinois contracts state the Buyer is obligated to move forward with the purchase and the Seller has the right to sue for performance.
Hope this helps.
VIcki Watzlawick
Broker Owner
Exit Platinum Realty
www.vickisdreamhomes.com
2007-02-24 03:07:18
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answer #2
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answered by Anonymous
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I am not sure I totally understand the question. It sounds to me like a buyer and a seller agreed to sell the house in question for X. Once the mortgage paperwork came through, the actual price was X+10,000.
Is this so?
In that case, unless you have a contract stating the conditions of the sale, someone is out of luck here. Either the buyer has to pay the increased amount, or the seller doesn't get the sale.
Not to toot my own horn, but this is why you need real estate agents. This is why we are around. We know the paperwork and the contracts involved and we make sure to get everything written down, to avoid these types of situations.
Does either side have a lawyer? If so, they should be able to sort it out.
I just cannot for life of me figure out how such a situation arose. Wasn't there a contract stipulating the price and conditions of the sale? If not, what were the two sides thinking? Doing a deal on a handshake is fine for a used car or something, but not on a major purchase such as a house.
Seriously, next time use a realtor. We are not all bad people and our job is to look out for our clients' best interests.
Laurin Jeffrey
Jeffrey Team Real Estate
www.jeffreyteam.com
2007-02-24 02:50:45
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answer #3
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answered by Laurin Jeffrey 2
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Did the buyer receive a Commitment letter from the bank with specific terms? Did the contract rate/term expire before closing according to the commitment letter? Seller should not sue, as they may not have rights. Obtain a turn-down letter from the lender, if you can, and send to seller.
2007-02-24 02:42:36
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answer #4
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answered by Tracy F 1
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It depends on the contract. A good attorney would specify that the buyer would have to obtain favorable financing before purchase. If the terms are not favorable to the buyer then their is no reason to finance the property with that bank. Problems would arise if you signed the unfavorable mortgage at closing.
2007-02-23 22:34:03
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answer #5
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answered by tianaramal 4
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Walk away and sue that is your right.
2007-02-24 02:55:32
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answer #6
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answered by Anonymous
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