Home Selling in Denver>Question Details

Dan, Home Seller in Denver, CO

The buyer wrote a contract with a letter stating they had the money, now they say the don't. What can I do?

Asked by Dan, Denver, CO Mon Oct 1, 2007

We sold our house and when the buyer wrote the contract they had a letter from their credit union that confirmed the funds. Now that we are ready to close the house, the buyer now says that the money was from an inheritance that the credit union now says has a different beneficiary. We spent allot of money out of pocket to get the house ready for the buyer, not to mention we had another buyer at the time who we turned down. Who is liable for this and what can we do?

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Geez!!! What a disappointing transaction. For the record, this does happen thus the contract is very important and how it is written.

Before I begin, this is not legal advice. Call an attorney and have your contract handy to give to them.

1. Do you have a seller broker? What are they telling you?

2. Did you get earnest money and specify if it would be used as liquidated damages in the event of Buyer default? Or did you require the buyer to specific performance in the contract?

2. When or was there a buyers loan conditions deadline and did they notify you prior to it expiring?

3. Was there even a financing contingency?

If your contract does require specific performance out of the buyer and they did not notify you prior to the loan contingency deadline you might have something to go on. These provisions are automatically in the Colorado Real Estate Contract to Buy and Sell (assuming you used this contract) and a box/blank had to be filled in.

I don't think the credit union is liable, since the contract is between you and buyer. I believe the ultimate responsibility lies on the buyer to perform, not the bank. Again, how was the contract written and ask an attorney.

Best of luck to you in the unfortunate situation.
2 votes Thank Flag Link Mon Oct 1, 2007
Dan, this is a nightmare that every seller dreads. At first I thought you were going to say - the credit union changed it's criteria... this is a whole new ball of wax. Of course there's always the specific performance clause, the attorney, not to mention the time and energy of putting together a suit.

Or, you can negotiate to keep the deposit funds, talk to your other buyer and move on with your life.

There is no question that "someone" is liable. The courts can determine this - but at the end of the day - you will be exhausted and have less than the deposit left to show for it....

Don't waste another minute - catch up with that other buyer... You never know until you try.
1 vote Thank Flag Link Mon Oct 1, 2007
1) Document all communications from the beginning of the relationship and contract to date, and make a chronological list of the events.
2) Add to the list each party that was involved.
3) Add what your costs were to each of #1
4) Take this to the buyer, and tell them you want to be reimbursed for the monies you actually put out of pocket...if you actually did have money put out beyond anything special such as cleaning, and repairs.
5) If you have expenses not noted in 4, you may possibly go to an attorney, or just leave it to "lessons learned" and move on. It may be better to just spend your energy on more positive things like selling than fighting. Just next time, make sure the communications are clearer and more timely with the person providing the loan
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1 vote Thank Flag Link Mon Oct 1, 2007
Wow Stu, that's quite a story. I think you need legal advice from an attorney. Real estate agents have opinions but can't give legal advice and I don't want you to rely on anything that you see here on Trulia as legal advice.
I don't know what your contract says about your legal remedies in the event of a dispute. Here in CA, most contracts contain a mediation and arbitration clause, but agreement to arbitrate or mediate does not apply when you deal with accusations of fraud. When someone states they have the funds already and then it turns out that this was not true, you are looking at potential fraud. My suggestion is that you tell them to get a loan and if they can't or are not willing to do that then go seek the advice of an attorney. Depending on what the credit union letter stated, there may also be some cupability on the part of the credit union as they are supposed to based their letter on due diligence research such as having seen bank statements showing sufficient balance to close. Good luck to you.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Mon Oct 1, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
Dan: How unfortunate. Hope the earnest money was high-- and that it was released to you.
That is why-- we all llke Closings-- to be sooner than later-- as every day could change with so many external factors. I would contact a Real Estate Attorney.

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0 votes Thank Flag Link Fri Apr 11, 2008
Dan; Sorry to hear about your situation. The best thing to do, in my opinion, is ask a good Real Estate attorney. I heard Oliver Frascona, Esq speak and have heard he does great work. You may want to ask him for advice by callinghim at 303-494-3000...
0 votes Thank Flag Link Fri Mar 7, 2008
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