The buyers are leasing the property and have an option to purchase, so they are in possession of the property for the next 10 months at 100% of what we pay on the first and second purchase money mortgages (but not all of the PITI, we're still out of pocket on the taxes and insurance). If they skipped out--we would pursue and use all legal options to collect a judgment. They are employed in a professional field and have equity in a home in another state as well as other assets and ongoing professional practices. They signed the lease when they failed to close about 6 weeks ago and needed a place to live. They failed to close as said that they did not like the loan terms at that time. We gave them a break. We had another lease on the property when they made the original offer and displaced that tenant to accommodate the buyers.
In addition to the lease, they also have a separate contract to purchase the property with us. The broker holds the good faith deposit. The have an extension on the contract on the contract to purchase is until mid-December. We understood, as of several weeks ago that they would be closing before the option under the lease and the separate extension on the P&S agreement ran out. Now they are working with the same lender, the same mortgage but at a better interest rate. I understand that they have another mortgage available to them through this lender. They now say that they want to find another lender and a better loan. Seems to me to be an act of bad faith. We have incurred expenses as a result of their delays and of course we have performed in every regard.
We think that looking for another loan just a couple of weeks before the third extension runs is an act of bad faith. Do you agree? We have conversed with several attorneys who all say it is and say that we should have the good faith deposit as liquidated damages (and others say we should assert that the liquidated damages are inadequate and we should seek to collect not only the good faith deposit but an additional judgment) if they fail to close by the extension and of course, the lease would be maintained as a separate agreement.
We are not trying to take advantage of anyone but are trying to protect our own interests. What do you Trulia real estate viewers think? Are we being to harsh or do you think that we're justified? To what extent? What have you seen and what would you do?