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 Cathyâ€™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:
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
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.
AGAIN, HOW BUYER FUNDS THE REQUIRED MONEYS AT CLOSING IS NOT MATERIAL BREACH!
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.
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,
The answer is to find a lawyer that does Real Estate law.
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.
Marc Grossman, GRI
Keller Williams Heritage Realty
Key point would how material this is. Your lawyer will have the answer.
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.