Home Buying in 01748>Question Details

Leland Celts, Home Seller in 01748

We went through a dry closing & all parties signed contract. Appears buyer did not have the cash funds to close. She pulled out. Is this bad?

Asked by Leland Celts, 01748 Sat Mar 5, 2011

faith? Buyer claimed to be paying cash. At closing she told her atty her money was in a CD and she couldn't get it in time. Contract gave her 2 weeks and she stalled everyday until the next to last day. Everyone kept asking her to produce proof of funds from her bank. She kept making excuses & promising to send it and to get the funds. To the very last she claimed to want the home etc. She pulled out of the deal saying she could not find an atty. (her first atty dropped her because she did not provide them with verification either.) Appears that she never had the cash that she claimed. She was trying to occupy home prior to close...is entering the contract on a cash basis but not having the funds to perform the contract an example of bad faith. We can confirm she did not have the funds to cover the transaction. Her earnest money check bounced. We want to recoup our moving expenses etc or anything. Happened in NC.

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Louis Wolfson’s answer
Be thankful, they did not move into the house and you did not sign a deed over to them. Your broker and or attorney should of protected you from the onset. I did not see in your notes that you had either? Cash deals should be verified and large escrow should be held by the escrow or closing agent.

Louis Wolfson
Web Reference: http://www.LouisWolfson.net
0 votes Thank Flag Link Sat Mar 5, 2011
I am so sorry for your loss. I do not approve of pre-possessions which your buyer was trying to do. I advise you to contact an Attorney. If your loss is less than $2500.00 in the State of Arizona, you may try small claims court. Check what the amount is in NC. I cannot give you legal advise and again advise you to find an attorney.

The moment your buyer's earnest deposit check bounced should have told you something right there.

God Bless You and good luck to you. If you need us to refer you to a Realtor® in your area, feel free to contact us toll free at 888-460-2911 or 928 649-9888
Sincerely,
Sandra J Steele
1 vote Thank Flag Link Sat Mar 5, 2011
I appreciate your letting us know.

Thanks

Louis
0 votes Thank Flag Link Mon Mar 7, 2011
Thanks all. This is what we learned later. Hope it helps. Realtor felt this was scam. Buyer claimed buying cash & wanted fast closing. Realtor told her she could not occupy prior to close. Atty office demanded verification of funds which was always in process of coming. Buyer tried to keep everyone off balance by promising info was coming but a coworker was out, or child sick. She was always coming by office with the info. if pushed, she would explode over insinuation she didn't know what she was doing. i.e. she was buying time. The closing was looming and dryclosing was posed as a temp solution. She said money in a cd & there was delay in converting to cash. What she tried to do was push to move in or to connect cable, utilities, forward mail, etc. she tried to get foot in door. After dry close letter from bank NSF. Realtor did advise dont allow move in. All were scrambling due to quick close date. The buyer did not realize she was going to have to produce certified check at closing & kept trying to get around this. Again realtor felt this was a scam but when the first offer came through it appeared that all was well. Buyer always had a seemingly reasonable excuse in the early stages. Again it was always to come, but "oh, its after hours and I don't have a fax, we are in a rush, we sold our house & the last deal fell through & we are living with relatives & need to get out...we will bring the verification letter that I have tomorrow, by the way we are having them hook up cable tomorrow..."
We, thankfully, said not until the home is sold etc. The realtor was helpful but a dual agent. The atty's office dismissed her very soon after check bounced. Realtor told buyer she would no longer represent the buyer & would assist us as sellers. We were all seeing that this was a charade. The realtor continued checking & found this person has convictions for obtaining property by worthless check & 16 or so convictions on NSF checks. She is currently on probation for those offenses. I am hoping this helps somebody else. We have talked with probationo officer & have little recourse without a conviction on the current NSF issue. But the buyer pulled out of the sale as noted once she realized she was not going to move in. She was very savvy in some ways & knew how to keep things off balance enough. We thought about selling the house on our own, but now feel that the money that we will spend on realtor will be worth it...note that buyer was pushing for a close in about a week. Because of the market downturn we were anxious but we should have known "too good to be true is too good to be true..." She did not want inspection done, she was paying cash, she wanted to close in a week and nobody at all had looked at the house due to back to back snows in the home's area. Never be so anxious that you don't stop to think & invest some trust in an experienced realtors instincts. Our realtors initial gut reaction turned out to be dead on. Sorry for longwinded explanation but use this as a reference to others...fortunately we only lost a few hundred dollars and can recover and we don't have to evict someone from our house. Our realtor was a big help and we all learned from this. Take care
0 votes Thank Flag Link Mon Mar 7, 2011
She probably thought she would have enough. Closing cost and things are more expensive than they seem. To withdraw money from a CD you have to pay a penalty but it is usually not that big. She should try again and apply for a mortgage. That is why people need a buyer agent to get on the right track.
0 votes Thank Flag Link Sun Mar 6, 2011
Kevin the only answer is never hire his agent or attorney.
0 votes Thank Flag Link Sun Mar 6, 2011
First of all why did anyone even sign a purchase and sale agreement without proof of funds to accept the initial offer. I hope there is at least a sizeable deposit in escrow. I would say that there will be no closing. Shame on anyone who let you sign a contract without checking first!
0 votes Thank Flag Link Sun Mar 6, 2011
You definitely never want a buyer to possess a home prior to ownership. Makes you wonder if that is what she was trying to do all along. The bigger question for me would be why was'nt proof of funds provided PRIOR to signing a contract with this women.

Writing a check that you know is going to bounce is a federal offense. Talk to an attorney and see what your rights are. In Massachusetts, a real estate contract gone bad is limited to the escrow monies collected for damages. You wouldnt have much recourse here in Massachusetts, but all states are different
0 votes Thank Flag Link Sun Mar 6, 2011
Curious to know why proof of funds wasn't required from your buyer before offer acceptance--did you have an agent....
0 votes Thank Flag Link Sat Mar 5, 2011
Proof of funds should have been required at the time she submitted her offer. This is the 'status quo' when making all cash offer.

And yes, based on what you have said, she appears to have bargained in bad faith. But the legal cost of collecting damages would far outstrip anything (if at all) you could collect from her.

In the future, cash offers NEED to have a proof of funds from day one. Otherwise, throw them in the trash.
0 votes Thank Flag Link Sat Mar 5, 2011
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