If your attorney is not able to give you this guarantee then you may have a cloud on your title until it is resolved. And if you are not able to provide clear and marketable title to the new prospective buyer, you would need to disclose this as an adverse material fact to any prospective buyers.
Please review this with your attorney as you do not want to compound the problem with a new buyer.
If you can pass clear title to the new buyer at time of closing, you should be okay with relisting and selling your property. And you can resolve the issue with the current buyer with whom you have a dispute as a separate issue.
Please bear in mind this is only my opinion as a real estate agent. We have been discussing a lot of contractual law issues here. You need to rely on legal counsel now.
Let me know how this all concludes. Yours is a situation that we can a learn from.
Thanks for sharing your experiences with the rest of us.
Prudential Ambassador Real Estate
In late November we entered into a Purchase Agreement (PA) for the sale of our home with a set close at 9:00am 3/4/11 (purchashers choice of date not ours). Under Section 7 of the PA, the purchaser noted, â€œall cashâ€¦ no financing requiredâ€ all parties agreed and signed the PA.
On 3/3/11 we received an email from our realtor notifying us purchaser needed to seek financing and would have to postpone closing. We subsequently learned purchaser ran into financial problems. Upon examination of the PA, we noticed the term â€œapproximateâ€ closing date of 3/4/11. We have been informed that under Nebraska Law, a reasonable time to delay a closing is granted if the problem is no fault of the parties or something unknown or unexpected occurred (accident on the way to closing, medical instance, unable to get to the bank for funds etc.) That was not the case here since the buyer originally agreed to the purchase our home without financing - and noted this under section 7 of the PA. The purchasers assumption of financial risk, or current financial burden or responsibility is a controllable factor by him and is therefore not a reasonable cause of delay or postponement.
We received no written request for an extension by the Purchaser at any time.
Based on the email provided by our realtor, we agreed that an extension would be provided if the Purchaser placed the homes utilities in his name by 9:00am 3/4/11 (as he would have normally done) and assume any additional cost we incur as a result of the delay. We requested this agreement be signed by Purchaser NLT than COB 3/3/11 accepting the terms of our extension. We did not hear from the Purchaser or his representative. A check with the utility company noted no request to assume responsibility for the property by the Purchaser. Later on 3/3/11 we sought legal counsel from a Real Estate attorney who reviewed our PA and drafted a letter on our behalf to provide to buyer through our agent. In the letter we noted our intent to cancel the contract and retain his Earnest Deposit of $5,000 should he fail to consummate the PA and close at the prescribed time of 9:00am on 3/4/11. We further noted the PA does not provide for an extension and no extension was official sought by the buyer. We further noted the he was not to seek financing for the purchase of our home under the PA.
Friday March 4, 2011 buyer failed to show for closing, made no notification to the closing agent or our representative.
We signed a cancellation of PA and sent it back to our realtor who provided it to the Purchaserâ€™s realtor. Our realtor emailed us to inform buyer is refusing to sign the request for cancellation of PA, has placed the contract in dispute and intends to close on our house sometime next week.
According to our attorney, we do not have an executable contract currently between us and the buyer since the he failed to consummate closure of the contract at the prescribed date and time and did not request an official extension, contract is expired. We have the right to re-market the house to prospective buyers and retain any earnest funds placed by buyer (buyer will not release earnest monies to us) A couple who saw the house and who were late on making an offer on it, now want the house but the buyer will not sign for releaseâ€¦ we are confused thoughâ€¦
Basically one cannot alter contractual terms without consent by all parties, the buyers attempt to seek financing substantively alters the terms of our contract and he is in breach. Although he will not sign release and will not provide us the earnest fundsâ€¦ The guy is a nut-case but sadly holding us hostage to an expired and voided contractâ€¦. NE laws are crazy! Our realtor never provided us buyers evidence of funds when we asked for it upon signing the contract.
"Cash" is another interesting concept. What does that actually mean legally? Cash can be argued to mean
getting money from the bank or getting money out of my personal account. Care needs to be shown in clarifying the situation when determining if you have a bonafide offer from a prospective buyer. Real estate
agents are not required to determine the verification of funds. They are required to disclose the buyer's financial situation only if we know for a fact that they are unable or unwilling to complete the sale. Have you
substantitiated yet that the buyer is unwilling or unable? From the things you wrote the buyers position is not
established either way.
Also contracts oftentimes use the term " approximate" for a closing date. If "time is of the essence" then the
contract should clearly state this and indicate what the penalties are for not meeting that date. Do you recall such a reference in your contract?
I get the impression that your buyer still wants to buy your house, if your buyer is able to put the cash together in a week or two, wouldn't that be better than going through the whole sales process again.
You also indicated that you had another buyer previous to the current one. Why was the sale not made with that person.? Or did that person come on the scene after the current buyer.
I think because of these unresolved issues, you are having a difficult time with this current purchase agreement. Once you surrender your "right to dispose" of your property to another person, you give them equitable title to your property. A right that can be defended legally.
The purchase agreement form you are referring to as coming from Nebraska. Where was this form obtained? Was this the form used by your real estate agent or was the form one designed by the Brokerage company with the approval of an attorney.
Sorry about all the questions. Now that you are in this situation, keep working with your attorneys. You need to rely on their expertise known as contractual law. Both you and the buyer are bound to the contract until the proper releases are granted. And unless this release is mutual, it may take some time. I know this is frustrating for you, but try to keep the emotions out of the agrument - it only escalates the situation even more. Reasonable people best solve complicated problems. Working with a mediator who can understand and present both sides can bring about a consensus between parties.
If none of this works, then the courts may have to decide..
Best of luck
Prudential Ambassador Real Estate
Who does this in today's marketplace???