What can I do when the buyers back out before closing and won't sign the cancellation agreement?

Asked by Amanda Klecker, Woodbury, MN Thu Oct 16, 2008

We sold our townhouse and it was set to close on October 30th. On October 12th the Seller's realtor left a message for my realtor stating the buyer's bank account was frozen and they need to back out as they were paying all cash (they are from France by the way). My realtor has contacted her several times in the last week leaving message after message to get more information and to get the Buyers to sign the cancellation agreement so we can get the $1,000.00 earnest money. Problem is now we are paying two mortgages becuase we bought our new house as soon as we had a signed contract.

Is there anything I can do? I'm wondering how successful a lawsuit would be as they are in France and they supposedly have frozen bank accounts. We are trying to get it rented in the meantime, but technically we can't even have it relisted until they send over the signed cancellation agreement which we have not gotten for a week now.

Any suggestions?

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Lenny Frolov, Agent, Brooklyn Park, MN
Thu Oct 16, 2008
I agree with Aaron that I dont think court is worth it over a $1,000 but its unfortunate that they put you in this position. I would re list it (if you dont commit to renting it) and make it known that it is subject to cancellation of another purchase agreement. Start a statutory cancellation right away which should take about 30 days.

If you do want to take them to court you may have the option (dont know what your contract looks like or what addendums are there) to sue them for specific performance which means the courts would force them to perform on the purchase agreement. I would highly recommend an attorneys opinion before considering this option.

Good luck.
Web Reference:  http://www.lennyfrolov.com
0 votes
Jason Sandqu…, , Minneapolis, MN
Thu Oct 16, 2008
Consult an attorney first and question about serving a cancellation statutory to see what they advise as to next step.
2 votes
Lenny Frolov, Agent, Brooklyn Park, MN
Fri Oct 17, 2008
I would just leave it in your realtors hands, I think it will be an uphill battle to try to get that $1,000. I would just say forget about it and try to resell your property.
Web Reference:  http://www.lennyfrolov.com
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Amanda Kleck…, Home Seller, Woodbury, MN
Fri Oct 17, 2008
Thank you all for your answers. So now the buyer's realtor finally sent over the cancellation agreement after our realtor mentioned pursuing legal action and they had filled out so they would get their earnest money back. Not to mention the buyers realtor had the agreement on Tuesday the 14th signed and filled out and din't bother to send it back until today.

Our realtor has been attempting to get in touch with the buyer's agent for almost a week now and still has received no actual phone call back. Is there anything we can do or just leave it in our realtor's hands?

We're just concerned about paying two mortgages until we can sell it and we need the thousand dollars to at least cover next month's mortgage on our townhouse.
0 votes
Aaron Dickin…, Agent, Champlin, MN
Thu Oct 16, 2008
You can relist it, but you need to disclose that it is subject to a cancellation of another Purchase Agreement & it cannot close until that is resolved.

If the Buyer won't sign the Cancellation because of the $1000, do you really want to tie your house up over that small of an amount? It likely won't even cover one house payment...

If they are unreachable and that is why they won't sign, you'll need to get a Statutory Cancellation from the courts.

As always, I am not an attorney and you should consult one for legal advise.
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