Home Selling in 32828>Question Details

Cathy Weissm…, Home Seller in Orlando, FL

I am the seller who signed a as is contract which indicated a cash transaction with no contingencies for

Asked by Cathy Weissmueller, Orlando, FL Thu Jan 1, 2009

financing. I gave the buyer an undermarket price for a cash deal. 24 hours before closing the buyer decided to finance my home which meant I would incur $4,000 of closing cose. I refused to close because i felt the contract was now invalid. Was I right? The buyer is threatning to sue me but my contact did not call for financing. Am I right?

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Hey all, This question is from January! Cathy has sold her house I believe, last I heard. They worked it all out.
Just wanted you to know.

Gay Middleton
1 vote Thank Flag Link Wed Mar 11, 2009

It ended well for her. She and I spoke back in January. Cathy had an agent that worked it all out in the end. They closed and moved on. Alls well that ends well!

Gay Middleton
0 votes Thank Flag Link Thu Sep 17, 2009
This question popped up when answering other questions in the area. It's been a long time, how did it work out? I'm sure we'd all like to know.

0 votes Thank Flag Link Thu Sep 17, 2009
I am happy that she sold. I think the confusion with this was whether the buyer incurred additional expenses for the seller when they changed their term of payment.
0 votes Thank Flag Link Wed Mar 11, 2009
Ms York,
Given the information by Cathy above, limited as it is with several unknowns.
I stick by my judgment and question yours.
If buyer and seller enter a contact- and that contract has NO contingent for Financing, Then if the buyer later does a finance, the contract is NOT effected in any way as long as the buyer is not harmed by such. For a contract to be in breach, there has to be MATERIAL BREACH. What we call Cash contract only requires buyer to fund the closing at the contract price with NO contingent for lack of funds at closing.
It makes no MATERIAL difference to the contact if buyer funded the contract at closing with a financed check, or a check from his checking account. Explain how seller is harmed?
This is under the doctrine of Substantial performance
You must explain, if you still cling to your agreement, how buyer changing to a financed loan, providing Need funds at closing differs from a cashers check at closing! As long as you fund in the coin of the Realm, you are good to go.
TO WHIT: how is seller harmed when he walks for the table with the same monies? NO HARM - no material breach.
To further explain what you do not understand, the financing contingency is just an escape clause should not the buyer be able to obtain the needed financing. When one does not opt this escape, he makes a Cash at closing with no escape for cause for not having cash (regardless of source) to close.
Now in Cathy’s situation, as reported above, which we do not have full appreciation of, at closing she incurred additional expense (God knows how/Why) which is Material Breach as it changes Material Terms of the contract.
I suggest you read up on Material Beach at
good definition for Substantial performance is:
substantial performance
n. in the law of contracts, fulfillment of the obligations agreed to in a contract, with only slight variances from the exact terms and/or unimportant omissions or minor defects. A simple test is whether the omission, variance or defect can be easily compensated for with money. Examples: a) the contract is for supplying 144 pumps for $14,400, and only 140 were delivered; b) the real property was supposed to be 80 acres and only contained 78 acres. This constitutes substantial performance unless the loss of two acres is crucial to the value of the property (e.g. reduced the number of lots able to be subdivided); c) the product was to be delivered on October 25 and did not arrive until November 5. This constitutes substantial performance unless the product was required for a Halloween sale.
See also: contract specific performance
0 votes Thank Flag Link Wed Mar 11, 2009
A negotiated settlement of this problem should have occurred. You wanted to sell the house and the buyers could not come up with the CASH to do so within the time frame of the contract. Therefore they were forced to get financing. It would have been wise for your agent to get the estimated HUD settlement figures for your cash settlement and then any costs above that should have been paid by the buyer. Contrary to what Mr. Bennett indcates these clauses are in the contract for a specific reason. If Clause 2 (financing) is changed from cash to contingent upon financing then all parties of the contract must be in agreement of that change. Please contact an attorney to be sure that I am correct. We can not indisciminately disregard different clauses in a contract because we have changed our mind. Especially if we are talking about an executed contract and not just an offer.
0 votes Thank Flag Link Wed Mar 11, 2009
Really hate to disagree with James, But it is not material how the buyers come up with money at closing.
It is only important that buyer has needed funds, regardless of how obtained, (legally) loans, gifts, manna from heaven, to effect the closing. NOT HAVING A FINANCING CONTINGENCY ON CONTRACT DOES NOT
MEAN BUYER HAS TO HAVE HIS OWN CASH TO CLOSE. Not having cash, but having financing in place to meet the requirements is all that is needed to meet performance. Also not closing on a exact date is not automatically material breach, as there are tons of ways around this issue.


Having a Real Estate lawyer is what is needed to review the contact that some seem to be having opinions about without ever seeing the documents.
0 votes Thank Flag Link Thu Jan 1, 2009
Hi Cathy,

They have two problems. 1) they did not close by date specific and 2) it is a cash sale and can only be changed with your consent.

You can most probably keep their deposit and tell them to go whistle.
See an attorney and make sure before you act or get bullied.

All the best in the coming year,

James Joseph
0 votes Thank Flag Link Thu Jan 1, 2009
Yes, everyone is right about there should be no $4,000, but this is not the point. Cathy says she being charge $4,000. Is this material? Is the contract Void, or Voidable. Unilaterally? if so by whom. How does the statue of Frauds apply. The estoppal of Latches. Prima Facie Evidence rule as broached herein. Can the said $4,000 be applied undercontract to Seller lawfully and with in contract - one i should state we have not seen.

The answer is to find a lawyer that does Real Estate law.
0 votes Thank Flag Link Thu Jan 1, 2009
Cathy, it doesn't make any sense that you would suddenly incur $4,000 worth of closing costs. Closing costs are paid by the buyer unless stipulated in the contract. If the buyer is threatening to sue you for specific performance, you should contact an attorney.
0 votes Thank Flag Link Thu Jan 1, 2009
Hi Cathy, Based on the basic information here one could assume you are "out" of contract with this buyer unless, 1) you signed an addendum to extend the closing date, 2) had a financing contingency in orig contract or added one or 3) somehow agreed to the financing contingency either verbally or written. While we are only home marketers and advisors a Good Realtor will not advise you on the legal aspects of your current situation. I agree with my fellow Realtors here: Seek the advice of a good Real Estate attorney. I do have referrals if you need one. Oh and by the way, if you have not already done so, contact a local Realtor that has experience in your neighborhood to support you thru the sale of this home or any other in the future. We are experienced to keep all parties on track and to the letter of the contract. While we do not advise on legal matters, we can help to prevent such last min drama. Good Luck.

Gay Middleton
Realtor/Sales Specialist
Web Reference: http://www.gaymiddleton.com
0 votes Thank Flag Link Thu Jan 1, 2009

I have the same questions as David & he gave you good info, but my other question is why are you not asking your Realtor this, or did you not use one? If not, you should have had an attorney look over the contract and should then be speaking with that person.

Again, as David said, I don't understand how you can be incurring $4K closing costs on someone else's loan with the info that you've stated. Also, I looked in Orange County and the property is obviously not listed in the name that you've given here.

Anyway, I really can't be of any further help since you are in the middle of a contract.

Best Regards,
Marc Grossman, GRI
Keller Williams Heritage Realty



0 votes Thank Flag Link Thu Jan 1, 2009
Your best answer will be found with the lawyer of your choice. Contract law, how it will be viewed in the courts is above the pay grade of Real Estate agents. It would seem that you are being asked to pay for things not within the contract. This should have some effect on the enforceability of the original contract.
Key point would how material this is. Your lawyer will have the answer.

0 votes Thank Flag Link Thu Jan 1, 2009
Cathy, there are too many questions unanswered here that have a bearing. 1. If it was a cash deal, there should have been no requirement for you to pay BUYER closing costs. Addition of a loan would involve buyer, not seller costs. 2. If the change was made 24 hours before closing, it is not likely the buyer could have put together financing that would have closed on time. If that is the case, seems to me he would not have standing. 3. Typically, if the sale is NOT contingent on financing, it would not preclude financing, but, the buyer would not be able to use lake of financing to get the house closed. I still do not understand how they could add in a requirement for you to pay the loan closing costs.

Question I have for you, if he can close this in a couple days and you either add the 4k into the price (do not forget to include additional closing costs on the 4k, in my neck of the woods, if you JUST added the 4k, you would recieve 400 dollars or so less.) would you still close? IF the answer is yes, make the contract adjustments and move forward.
Web Reference: http://mycountryhomes.com
0 votes Thank Flag Link Thu Jan 1, 2009
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