I have a contract to buy a house, I was suppose to close yesterday, 7/12, as stated in our contract, but my loan officer is not done with my mortgage.
The loan officer says we will be ready to close on 7/16...Now the seller and their agent are angered and have relisted the home (which was on the market 9 months when I made an offer) and claim they can keep my earnest money, and void any contracts.
Both the buyer (me) and the seller's real estate agents have now become worst enemies, and are threatening legal action...I'm shocked!
Just wondering if the seller can legally keep my earnest money, and relist because I'm a few days late to close due to my loan officer?
Are they overreacting? Am I screwed?
Need advice please!
2007-07-13 05:46:34 · 15 answers · asked by erinjanae 2 in Business & Finance ➔ Renting & Real Estate
This is not a good real estate market to make idle threats in. Yes, they can definitely keep your earnest money and relist the home and void your contract, however they would be absolutely ridiculous to do so. If this home has been on the market for 9 months already, chances are the home would be on the market for a long time again and they would lose a lot more than the money they would make from your earnest money. Have your agent and broker contact the seller's agent and ask for a 5 day extension and explain what went wrong. Sometimes things happen in the 11th hour that are out of everyone's control. Best of luck to you and I know how frustrating this can be. You should be fine.
2007-07-13 06:09:57 · answer #1 · answered by dzwreck 4 · 1⤊ 0⤋
They can't just keep the money and put the house on the market again. In most states, they need a release to put the house back up for sale, and the money in escrow can not be released when there is a dispute- if it is being held by a real estate brokerage.The brokerage wouldn't take a chance and release it to the wrong party. They would be liable. They would have to go before a judge, and that takes time. Perhaps they are afraid that on Monday, the Lender will reject you. Lenders can do that.
As a legal matter, the Seller will prevail if the agreement is written in their favor--read your contract. Where is your realtor in all this? You are not getting very good advice. Call the Broker ( the agent's boss) and demand a sit-down meeting. Ask all of your questions and devise a game plan.Call a lawyer, too. And, did you find out why the Lender waited until the last moment to finish underwriting? Be very careful. Is you interest rate protected --will it be the same on 7/16 as it was on 7/12? Many lenders don't guarantee the interest rate after the proposed settlement date! Read your commitment letter.
Make sure you don't go out and incur additional debt until after the closing. That can change your credit score and then they wouldn't have to fund the transaction at all. I once represented a family that went out and charged a lot of furniture. That put too much debt on, and the lender cancelled their loan. That really happens.
Every state has its own real estate laws. Talk to your broker, and talk to a lawyer. It is really important that you do everything in your power to protect your investment so far.
Good luck.
2007-07-13 06:05:21 · answer #2 · answered by es 5 · 1⤊ 0⤋
They are over reacting. The first thing you do is kick you loan officer in the place where it might hurt MOST. This idiot KNEW your closing date and has precious little excuse for not being ready, unless you did not give him adequate time.
The sellers have a right to relist, but they also have some sort of legal obligation to complete the deal to which they agreed. You were in BREACH of contract by not closing timely, but such breach does NOT automatically invalidate the contract.
By breaching, you now may be held responsible for any costs incurred by the seller due to your failure to close timely.
I suggest consulting with a qualified real estate attorney to discuss your situation. It may take nothing more than a stern letter from an attorney to set this seller and listing agent straight.
2007-07-13 05:53:32 · answer #3 · answered by acermill 7 · 0⤊ 0⤋
Yes, they can unless the contract was CONTINGENT on you getting financing and closing by that date. If it was contingent and you werent able to close, then the entire deal was null and void and your deposit is refundable. If you, however, firmly agreed to close by that date and left no contingencies, then you essentially broke the contract and they can keep the earnest money.
But, I would tend to think it is just an idle threat. It is much more beneficial for them to wait a few more days to close than to try to relist it. They are overreacting in this situation IMO.
Get the loan officer to contact your agent and the seller's agent to explain the situation. They may be upset because they think you are trying to back out of the deal and are just playing games.
You can offer to pay the seller's interest on their mortgage for those 4 days so that they are not out any money because of your loan officer's failure to get things done on time. If your loan office had promised things be done by 7/12 and you did everying on time that they asked of you, you may be able to get them to pay all or part of that cost.
All isn't lost yet, but I think you are dealing with a bunch of immature idiots. I mean, really - 4 extra days to close???? Do they really think they can relist it and get another contract and get closed in those 4 days?
2007-07-13 05:49:10 · answer #4 · answered by sortaclarksville 5 · 0⤊ 0⤋
You must make peace with the seller and their Realtor.
It is not unusual to miss the closing date. Communication is absolutely necessary. Common sense should be your guide. First assure that you are as anxious as they are to close. It is not in your hands and the delay is as disturbing and stressful to you as well. Contact the bank to co operate by providing you a real closing date and their assurance that you have met all their conditions. At this point ask for an extension giving the seller the date when you will be able to close according to the bank.
If the bank cannot provide you this service they will have to send you a letter to advise you that you have been denied a mortgage. Your contract will protect you and your deposit will be returned. While you may have not purchased this property you have gained a valuable lesson as to how to deal with the seller and their agent .
Regards,
Gabriel Palotas/Broker
Direct Power Real Estate
Pompano Beach Florida
2007-07-13 12:03:38 · answer #5 · answered by palotas46 1 · 0⤊ 0⤋
Wow.. they are threating to pull the deal because of 4 days delay? Thats absurd, and I would bet they are bluffing.
Every state has different laws on this matter. In my state you are given up to a 5 business days to delay the closing. If you are using a lawyer ( and this is exactly why everyone should) I would contact them ASAP.
My guess is that is going to work out ok for you. But really dont let it go any longer then the 16th.
Either way, I would think most sellers are not going to want to deal with all the legal headaches they will face just for 4 extra days of closing time.
2007-07-13 05:51:08 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I closed last month on my home, our realtor told us when we put down our earnest money we would only lose it if we backed out , but if something we had no control over happend i.e loan not going thru or not going thru on time we would get all of our earnest money back. But legally they can relist the property due to the contract being expired. ask the realtor about an extention on the contract
2007-07-13 06:05:57 · answer #7 · answered by DAVID O 1 · 0⤊ 0⤋
I just bought a new home and you are screwed! There is nothing that you can do to get your money back because in your contract you stated that you would close on said date, but did not hold up to your end of the deal. The money you put up is to hold the home until said close date. Sorry, but unless you can talk the seller into letting you purchase the home as you agreed with a little time extension, you may have lost your money and your house.
2007-07-13 05:51:11 · answer #8 · answered by Breaking hearts since 1977 3 · 0⤊ 1⤋
I never heard of anything like that --big law soit over one day. If you back out and do not go to closing then everything is your fault and keep the deposit. I bought 2 homes and never gave more than $500 ernest deposit. If the seller refuses to go to closing you get the deposit back.. The bank had not finalized the loan on closing---cannot enforce a contract if you do not get financing. Yesterday you could not consumate the buy but today you can.
2007-07-13 06:21:16 · answer #9 · answered by Gerald 6 · 0⤊ 0⤋
I agree with the others, they are probably bluffing. Contact your attorney for specific questions. There is no guarantee the sellers are acting like mature adults but most people would rather sell the house (especially if it took nine months to sell) than keep a couple thousand dollars in earnest money.
Are you brave enough to call their bluff and walk?
2007-07-13 07:02:01 · answer #10 · answered by Adoptive Father 6 · 0⤊ 0⤋