Accepted offer non grata (Legal Question) - Posted by Joel David

Real Estate Investing
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Posted by Tim Fierro (Tacoma, WA) on April 22, 2002 at 12:29:08:

Depending on how the contract is written and if the seller is correct, the seller doesn’t have to do anything but request the monies.

The buyer on the hand may have to prove to the one holding the money that they deserve it back.

Continuing grief, time spent; shouldn’t be anything for the seller. Even if the seller can’t get it back, at least make it hard for the buyer to get it back for the grief already struck to the seller; by just saying no to the release.

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Accepted offer non grata (Legal Question) - Posted by Joel David

Posted by Joel David on April 22, 2002 at 09:25:22:

I have a question for your guys. We have purchased a duplex and are now trying to sell our single family home (to make a long story short, we waived our home sale contingency and now are the proud owners of 2 homes). Anyhow, we had a buyer make an offer on our house and we accepted. These are young first time buyers and after the inspection they wanted out of the deal. We have the right to cure and they are not willing to provide us with a list of what we need to cure (according to WI law then need to give the inspection report and a list of things they want cured). Rumor has it that they are not even looking at houses and basically freaked out about the whole process.

My question is, how much crap do you have to go through in order to keep the 2k in earnest $$ they put down? It seems like an open and shut case…binding contract between two parties and they want out with out justification (financing is pre approved as well so that isn’t an out) but if there is a lot of legal manuvering that can be done I might just drop it and move on.

I know this isn’t a real creative financing type of question but I figured you guys might run into this from time to time. What do you guys think?

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Re: Accepted offer non grata (Legal Question) - Posted by Nate(DC)

Posted by Nate(DC) on April 22, 2002 at 17:09:21:

Both Tim and Phil have given you good advice. It depends on what exactly your purchase agreement says.

Definitely read your contract and, if you have an agent, have them explain anything you do not understand. (You should have done that BEFORE you signed it, but better late than never).

For example, here in the DC area the “standard” Realtors contract has home inspection language that says the contingency terminates by whatever deadline the parties have agreed on, unless EITHER the buyer gives a list of items to cure, OR the buyer gives notice declaring the contract void (i.e. if the buyer found something that was unacceptable and incurable such as high radon levels or the like). If you were using a contract that had that language in it, you would be out of luck because the buyer would have the right to cancel the contract based on the home inspection results provided they gave you notice of it within the deadline.

Whatever your contract says is going to govern how the situation is handled.

Good luck,
NT

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Re: Accepted offer non grata (Legal Question) - Posted by Tom

Posted by Tom on April 22, 2002 at 11:52:03:

I’d say move on, $2K is not worth the continuing grief and the time spent trying to get it.

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Re: Accepted offer non grata (Legal Question) - Posted by phil fernandez

Posted by phil fernandez on April 22, 2002 at 10:34:26:

It would depend on exactly what your purchase and sales agreement says.

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Re: Accepted offer non grata (Legal Question) - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on April 22, 2002 at 10:33:17:

Hold out for the cash. They caused you grief, get relief. Read your contract for contingencies. If there is no other contingencies except this one, you ‘could’ get it. Verify that they have released the financing contingency, or never had one.

For the inspection, the wording on there should have dates for compliance. My local contracts will state something like a choice of A or B. A would be for the buyer to say no to the inspection; and it’s all over. B would be for providing the list of fixes within xx days. Then xx days for seller to respond, then xx days for the buyer to agree to the repairs or remedy. So read your contract closely.

Usually someone is holding the earnest money and that someone can’t release the funds without the signature of those involved. I use my office and not escrow when I represent the buyer; and I prefer escrow hold the funds if I represent the seller. If escrow has the money, and you are correct in your contract, then you can just say no to the release of the funds and let the buyer try to plead their case. At some point you may settle for 1/2, or just end up letting them have the money. They made it hard on you, now make it hard on them to recover the money.

If you have an agent, have them explain this to you. You can also go to a lawyer to see where you stand.

BTW, we have a special wording on our MLS contracts that state BUYER BE CAREFUL or words to that effect because if the procedure is not followed, you are still liable for purchasing the property. Words close to that. Sounds like your WI law (could be contract wording, not state law), is preparing the buyer for this type of action by letting them know they have obligations.

Read your contract thoroughly, talk with your agent, or see an attorney; and you will know if you are in the right. Either way, if you don’t sign a release for the funds, the buyer might have to go through some hoops to get their money back.