Home Buying in 22033>Question Details

Tsailor46, Home Seller in Fairfax County, VA

The buyer has decided to not go to settlement and signed the standard NVAR 1116 form to release the earnest money - but we want more.

Asked by Tsailor46, Fairfax County, VA Fri Feb 1, 2013

We have to start over now looking for a buyer and it will take that person a minimum of 2 months to get thru the loan process. It has been 2 months now with this buyer. We already moved, the house is vacant and costing us every month. Question - is there any precedent for 'how much' compensation can be/should be provided in a cases like this? The earnest money basically covers our mortgage costs for the past 2 months. But we've been off the market, lost out on other buyers, and are faced with carrying the mortgage now for more months hopefully with a new buyer. Can someone tell us any guidelines or experience in a case/cases like this?

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Answers

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Like Colin said, talk to your agent & broker for advise. If needed, they have a legal department to talk with also.

Honestly, suing can be lots of headaches, money and time.

Go for a new buyer, with spring, it shouldnt be an issue. However,when you get another buyer have a 30day close. If they insist on longer they will have to put 2x the earnest money down (or a $$ you would need to compensate if a loss accured). Furthermore, make sure there is a clause that they have to have all contingencies satisfied in the normal 30day close time. That way they cannot walk away after 2 months without a penalty that you dont have to sue for.


Good Luck & if you need help and you are not using an agent send me an email!!


Bree Lawrence
Coldwell Banker Residential Realtor
Bree.Lawrence@cbmove.com
0 votes Thank Flag Link Sat Feb 2, 2013
Dear Seller:

It is very unfortunate that you have come to this point. I don't understand that why you have waited 2 months for this buyer to close on your house where most lenders close transactions between 3-4 weeks time these days.
You have not mentioned why the buyers are walking away from the house?? If it's because of one of the contingencies (Home inspection, financing, appraisal, HOA disclaimers etc) then you can't sue the buyers for any reason.
Most seller's agents evaluate offers based on financing & lenders to make sure that it goes to closing on time. Home inspection contingency is due within 7-10 days, financing and appraisal generally 21 days, notices are sent on due dates to make sure that these contingencies are removed.
Now that you have two mortgages on you, you may consider to rent your previous house out for a year and can put it back on the market (2-3 months prior to lease end) while the tenants are still there (I have done this in the past). This way you can be free from paying two mortgages and might even get better value for your house next year.

Hope this information is helpful to you!!

Best Regards,
Faiza Alvi - Realtor®
Prince William Realty, Inc.
703-389-7973 (Direct)
703-580-9995 (Fax)
http://www.house2homeva.com
MILLION DOLLAR CLUB - PWAR 2011

I believe:
Real Estate is about building relationships
& serving clients with honesty, integrity & passion.
0 votes Thank Flag Link Fri Feb 1, 2013
Dear Tsailor46,

According to the local sales contract (Fairfax County) the buyers obligations are not limited by the amount of their earnest money deposit. If they defaulted on the contract they can be sued for actual damages. It isn't clear from your message that they actually defaulted. If they used a legitimate means to get out of the contract then you are out of luck. For example there might have been an appraisal under-valuation, or some other situation that allowed them to exit their contractual obligations. As a practical matter, it is very rare that buyers lose their earnest money deposit--even if they are in flagrant default. I haven't seen one case in 25 years experience (old timers told me about cases they saw). If these buyers released their earnest money deposit to you, you should consider yourself lucky. Using the legal system, to sue, is rarely productive. Your real estate broker/agent can tell you about this. Sorry for your difficult situation. It is probably best to move on to the next buyer.
0 votes Thank Flag Link Fri Feb 1, 2013
First: your agent and your agent's broker are ultimately the folks you would want to seek guidance from.

That said: if, in fact, the buyer is just walking away outside of any contingencies then in theory you could sue for "performance" of the contract, or at the very least for damages. Given the tight inventory right now, that may not be worth your while as there is a good chance you could find another buyer in reasonable time. It is also worth mentioning that it is uncommon for a buyer's loan to take 60 days to produce. Most lenders will get it done in 30 days or less.

You may consider seeking legal council regarding your contract, and again, speaking with your agent's managing broker. Only you, a trusted attorney, and your broker can determine if it is even worth pursuing a suit of any kind.
Web Reference: http://thebeltwaylife.com
0 votes Thank Flag Link Fri Feb 1, 2013
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