Home Selling in New Haven>Question Details

Hamden_S, Both Buyer and Seller in Connecticut

I was selling my condo and buying a new house. The closing on my new house was contingent on selling my condo

Asked by Hamden_S, Connecticut Wed Feb 13, 2008

(which the buyer of my condo new). The buyer delayed the closing due to a problem with his mortgage. We found out the night before the closing. What legal recourse do we have to recoup our expenses?

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7
You have to speak with an attorney. However, if all sides are still willing to work together, you might be able to work something out. I understand that emotions can run high, but do your best to stay calm and work towards a solution. At the end of the day everyone wants the same thing to sell/buy the home they're after. Situations happen, work with each other rather than against...you might be surprised by the outcome. Good luck and let me know if I can answer any further questions for you.
3 votes Thank Flag Link Thu Feb 14, 2008
I suppose I am not supposed to give 'legal' advice, so I'll try to keep it as close to 'real estate' advice as possible. Generally, recourse on delayed closings would needed the term 'Time is of the essence' on the contract and/or a specifically stated a penalty for days past the the agreed closing date. ex: "$100 per day delayed past the agreed closing date." Contact a lawyer for details.
0 votes Thank Flag Link Fri Dec 26, 2008
This answer is to Keith Sorum in Burbank who does not know CT law and still has the audacity to say shame on you and your attorney. Hubbard Clauses are legitimate and national, not just CT Law. It is not uncommon and that agent should only speak on subjects they know about. Don't pay any attention to their advice, as he knows not what he is talking about.
0 votes Thank Flag Link Tue May 27, 2008
There are many factors and big decisions you have to make. 1. More then likely, the buyer is going toclose. A real estate transaction is full of contingencies. It seems as if you may be just one of many who are affected. If you demand the buyer to close, and you tell them you will press on with legal action, the buyer will exersize any right he has, and get out of the deal. I am sure they still want to buy your condo, or they would not have gone this far. They spend a lot of money as well to close. Check with your attorney, and good luck!
Web Reference: http://www.ericschuell.com
0 votes Thank Flag Link Fri Feb 15, 2008
As far as legal recourse you need to speak to your Attorney. With the current climate in the real estate market, it's taking on a HUGE RISK having that contingency. It's "The Domino Effect". Hopefully you and your buyer of your condo and the seller of you new house will understand and you can all work it out! Good Luck!
Web Reference: http://www.QuinnRe.com
0 votes Thank Flag Link Thu Feb 14, 2008
Hamden
Shame on you and your Realtor.
I do dnot know Conn., RE law. However, it is hard for me to believe that it is possibile to have an offer accepted by a seller that allows the buyer to cancel at the last minute.

Just to put my answer in perspective, laws vary from state to state. The mortgage crunch as affected many transactions. And I do not know your specific circumctances.

In Callifornia, the buyer CAN stipulate that the buyer has until three days prior to the close of escrow to remove the "loan contingency". We had an offer like that come through two weeks ago. It was rejected by our recommendation.

From a lender's perspective, three things need to happen.
1. The buyer is approved for a mortgage of a specific amount.
2. The prpoerty appraises for a specific amount.
3. the property is inspected by third partiies and is found to be what they thought it was.

At this point, there is a confirmed ability to purchase, value to purchase, and property to purchase.

OTOH, in Caifornia, 45% of escrows close late. (CAR 2997 Sellers' survey).70% of the time it is the lender's fault. So the ONLY way to make sure a loan closes on time is to have the buyer CO APP with a konwn lender to the listing agent to make sure that they close. Again , with the mortage hiccups, things cazn happen. However, the delay should be known in advance and the parites notfiied.

Not knowing the specifics of this case, I have a couple of scenarios:
1. Is the buyer closing late or not at all.? If the loan contingency was allowed to remain in effect iuntil the close of escrow, just based on your post, it is a case of shame on you and your Realtor for not being on top of it.
3. If the loan contingency was in effect ON THE CONTRACT, but your Realtor did not follow up, then you may have some grounds for damages. In California, a contingency is only valid if we serve notice to the Buyer that he will be in default if he fails to remove the contngency, then we start cancellation of escrow proceedings. If we do nothing, then the contingency lapses and it is no longer a contingency.
4. If the buyer committed some sort of fraud (lied on his loan app, for instance) you may have some damages.

I wish I had more facts. I suggest you get the facts and discuss it with yoru Realtor, his broker, and/or an attorney.
0 votes Thank Flag Link Wed Feb 13, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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You should really speak with a Real Estate Attorney. Without knowing all the specifics, it would be hard for anyone to comment because there are so many factors involved.. Hopefully you already have an attorney - I would speak with them!
Web Reference: http://www.carlguild.com
0 votes Thank Flag Link Wed Feb 13, 2008
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