Home Selling in Fairfax>Question Details

Ron Brooks, Both Buyer and Seller in Harrisonburg, VA

My buyer wants to back out on a ratifed contract and forfeit his deposit. Both agents (seller/buyer) seem ok

Asked by Ron Brooks, Harrisonburg, VA Mon Jun 2, 2008

with this. I want to pursue additional damages. Do all agents take this laissez faire attitude ? I guess contracts mean nothing to Realtors unless the house is valued over $1 million (????). Maybe a bit of conflict of interest in the making. (save your breath if only reply is check with an attorney which I most certainly plan to do). I am just appalled at agents' response.

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Stop Being a greedy loser and let it go. They made a mistake and got smart and decided your house would not be a good fit for them. I hope you end up buying a home that you don't want and get stuck with it. Do the honorable thing and put it back on the market. I have been a successful Broker for years and I always stand behind my clients. I will do what ever I can to get the buyers out of deal they want out of.
Yeah maybe you should hire an attorney and sue them, that would be such a good thing for everyone.
1 vote Thank Flag Link Sun May 23, 2010
Hi Ron:

That's why I usually ask my seller clients to be extra careful if the good faith deposit is really low and $5,000 is very low in my opinion; although I am not sure what percentage it is comparing to purchase price.

With a low good faith deposit, I am always suspicious of the fact that the buyer might walk with little consequences.

In California, if both sides sign liquidated damage clause, the seller can only get up to 3% of the purchase price for damages. That's not much, but used to compensate the seller for taking their house off the market while buyers do their due diligence.

If they back out before removing their contingency, the seller may not even have recourse. If they back out after all contingencies are removed, the seller can only get up to 3% of purchase price. The buyer can put lis pending on the property, and you can't sell the house until buyers releases that.

I understand your anguish but that's what the contract said, I presume. You can start legal action, but it could take a lot of energy and very precious time.

Best,
Sylvia
1 vote Thank Flag Link Mon Jun 2, 2008
Sylvia Barry,…, Real Estate Pro in Marin County, CA
MVP'08
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Ron,

Okay, so you have 2 options. Take the $5,000 and call it even. Or, leave the deposit where it is (neither you nor they get it), and pursue additional damages beyond the $5,000. A contract by definition, doesn't mean that one side gets all the benefits, unless it's written that way. In your case, you accepted the terms of the contract as did the buyer. Now you have an issue of performance and you have specific remedies. Your first remedy was spelled out in the contract directly. The other is implied by failure to perform, AND your not accepting the first remedy. The fact that this latter remedy requires you to get legal advice and possibly representation from an attorney, ties up your property, likely until resolved, and doesn't guarantee an outcome, isn't the best feeling in the world, but it is your choice.

Simple answer is, if you're real loss is greater than $5,000 and you can prove it, then pursue it. If not, then pocket the $5,000 and move on to the next buyer.

Good luck, either way,

Jeffrey
1 vote Thank Flag Link Mon Jun 2, 2008
Ron I can see a couple of ways this can go. This is not legal advise by the way. The first is that you refuse to sign the release and sue the buyers. The buyers counter sue and their attorney places a lis pendis on your property. Even if the property could be placed in active staus again durring the court actions the suit would have to be settled and the lis pendis removed before you could tranfer the property to another buyer.
Transfer may be a reason out of the contract if they talked to their lender and let them know. Most loans are offered to owner occupants and if the lender knew that they were moving may decline to give them the loan. If these were my buyers, and everything on their part is truthful, I would have approached the transaction just as has been done so far and then follow up with a letter from the lender. If we were still in the financing contingiency period my clients would be asking for a return of ernest money.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Mon May 24, 2010
Stop Being a greedy loser and let it go. They made a mistake and got smart and decided your house would not be a good fit for them. I hope you end up buying a home that you don't want and get stuck with it. Do the honorable thing and put it back on the market. I have been a successful Broker for years and I always stand behind my clients. I will do what ever I can to get the buyers out of deal they want out of.
Yeah maybe you should hire an attorney and sue them, that would be such a good thing for everyone.
0 votes Thank Flag Link Sun May 23, 2010
Dear Ron,

I am sorry to hear of your unfortunate situation. What type of transfer is the buyer receiving, military? I am not sure but even if they provide legal documentation for the transfer, they may still be bound to the contract. I think that your best bet has already been iterated by a few agents: if your legal fees will not eat away too much at your proceeds, then you may want to go for it.

A word to the wise, most of the time it is actually to your benefit to keep the deposit, put it back on the market, and don't pursue anything based on "principle." Whenever I hear someone say, "It's not the money, it's the principle behind it..." they end up being more miserable because they let a bad situation get worse and waste so much of their own time that in the end, the money is never enough to make them feel better.

Although I do not know your agent, it may not be that they do not care, they may just be trying to keep you calm in a tense situation. I can assure you that the majority of agents truly do appreciate the gravity of legally binding agreements and often we are the ones that have to remind our buyer and/or seller clients of this.

I know that this gets very frustrating because I am with you, if someone signs a contract, then they should be held to it. In this case, at least you are getting $5000, it could be much lower like $500. In the meantime, try to focus on the positive, and I wish you the best of luck in this matter.

Samantha Sedlak-Moren
Abbitt Realty
(757) 810-6153
0 votes Thank Flag Link Tue Jun 3, 2008
The contract indicates that if I accept deposit . I can not pursue other litigation. A part of the withdrawal addendum is that both Realtors are absolved of any further liabilities, etc. wow--what a self-serving cop out.. The point I am trying to make is that "a contract means nothing" . All that talk about being liable for brokers fees, etc. is bunk. Or maybe it works in reverse for the seller.
0 votes Thank Flag Link Mon Jun 2, 2008
Your purchase agreement should have very specific language spelling out what happens in the case of the buyer's nonperformance. Many contracts state that the seller's sole remedy is to take the deposit. Read your contract.

Contracts do, by the way, mean something to agents. If the contract already specifies that your sole remedy is to take the deposit, the smart thing for your agent to do is get to work finding the next buyer, not assist you in potentially fruitless litigation.

I don't know your agent, but if they have been good thus far, don't mistake their desire to move on with lack of caring - after all, they have invested time and energy and have to start from scratch, too.
0 votes Thank Flag Link Mon Jun 2, 2008
The facts: all contingencies were satisfied; the deposit was $5000. The buyer's excuse: being transferred (but no documentation provided). Moreover, being transferred is not a "legal" way out once contract is ratified.
0 votes Thank Flag Link Mon Jun 2, 2008
Ron,

As answered previously, you should be within your rights to require performance of the contract. But, in addition to cost, you have to consider the fact that you will probably not be allowed to sell the home while you try to settle the suit, either through mediation, or a law suit. No title company is going to consider providing title insurance with such a "cloud" over the outcome of your action. If you don't have to sell on a time schedule, and the deposit is significant (you haven't told us the amount), then certainly consider going through with the action to pursue the buyer. Note that you might not get what you wanted, which is forcing the buyer to purchase the home. Maybe they can't qualify with their lender, or possibly the home might not appraise. The mediator or judge could also decide to try to award you monetary damages instead, which you would have to prove.

Best of luck,

Jeffrey
0 votes Thank Flag Link Mon Jun 2, 2008
Ron,

Typically, one just cannot assume that the only damages would be loss of deposit, and I feel any buyer is risking more than just loss of deposit when wanting to back out of a deal. Sellers can pursue additional damages, and also force the buyer to purchase. But with that said, I have to wonder why your agent is so willing to let it go? What is his/her response; buyer's loan weak, home inspection nopt completely satisfactory, etc.

Curious...

Frank Biganski, ABR
0 votes Thank Flag Link Mon Jun 2, 2008
You can absolutely go after them and ask a judge to "make them" perform to the conditions of the contract. The question which comes into play is; does this really get to the end goal of getting your home sold? It might. It also may take a lot of time and energy and you may get nothing in return but a big headache.

When buyers and sellers start suing each other; it often simply delays the selling of the home and becomes unproductive.

While I do not know the details of what happened; many times the best thing to do is in fact move on. It doesn't make it right that buyers or sellers can just "change their mind" - in fact it STINKS. But it does sometimes happen.

Best of luck.
0 votes Thank Flag Link Mon Jun 2, 2008
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