My husband and I have contracted with someone to sell our house in Texas. It is a large residential house.

Asked by ALB, Texas Mon Dec 22, 2008

There were some upgrades to the property that were not reflected on the old survey that we furnished. The buyer did not order a new survey that included the improvements as required by their lender. The buyer never bothered to even look at the survey prior to closing nor did their realtor provide them with a copy of it. In the closing agents office, the buyer discovered an easement that he did not like and decided to back out of the purchase. He used the excuse in paragraph 4A1 as grounds for backing out of the contract, when in actuality, their lender just needed a recent survey that included the property improvements. They are claiming that they do not have financing because they do not have property approval that meets their underwriters requirements. We have spoken to their lender and they state that all they need is a new survey and then the loan would be approved.

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T.E. & Naima…, Agent, Dallas, TX
Mon Dec 22, 2008
By upgrades, judging from the story, you must mean additional buildings or alterations to the existing structures. Nothing else would be shown on a survey.
It sounds like the buyer came to the closing table and changed his mind. Objections to commitment for title insurance are limited to the period shown 6D.
Normally, the lender does not care if easements appear. You should ask the buyer to provide the lender's objection in writing. The limitation on backing out due to non-approval of the borrower/buyer is in the Third Party Addendum. The limitation on backing out under 4A is the closing itself. So, if the lender actually did not approve the property to be used as collateral for the mortgage loan, that appears to satisfy 4A as a valid reason for termination.
Only a judge and jury can make the determination, and you should be seeking legal counsel from someone practicing in real estate to assist and advise on the matter of approvability of the property for use as loan collateral. We, Realtors, cannot advise you.
Your attorney can tell you whether loss of earnest money is in order or if you need to back off.
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Dallas Texas, Agent, Dallas, TN
Thu Dec 25, 2008
Sorry to hear about all this, however contract governs what takes place. If they were to obtain a survey did not follow contract buyer could face loss of earnest money paid, potential of being sued. Lender only requires new survey which does not impede success of loan approval buyer would have no recourse to close.

Listing agent, real estate attorney, title company you need to discuss all conditions of contract, any answer provided is based on what is stated in your comment.
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Bruce Lynn, Agent, Coppell, TX
Tue Dec 23, 2008
Where is the title company in all this? Normally they are the ones that order a survey, not the buyer themselves. You'll have to go back and look at their timing for objections, but there seems to be something wrong here. It is very unusual that someone can back out at closing due to this type of issue. The only exception I can think of is if you had a very quick contract to close and the normal succession of dates overlapped to close together. If you were all the way to the closing table, its done with underwriting and the you perhaps could sue the buyer to close....but it depends on your contract and what timeframes you have given each other to respond.
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Fred Romano, Agent, Servicing All, CT
Mon Dec 22, 2008
Sounds like a job for your attorney to handle. Best of luck!
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