Seller Will Not Close And Noone Knows Why
I was scheduled to close on a property today. Yesterday, evening after 5 p.m. the seller's attorney contacting me and said that the seller was not willing to close but could not disclose why. He only stated that the seller was not happy with the numbers and that he needed to work things out with his agent.
Today, no one has any information as to why we were not able to close and when we will be able to close.
I've paid for a builder's risk policy, the appraisal and rented a dumpster. Also, my lender says that I will have to pay additional closing cost since the funds will now sit in escrow with the title company. Lastly, much of the work needed on the property is on the exterior and my contractor wants to start and complete the work before it gets to cold.
Can I request my earnest money back and the cost of the appraisal, insurance and dumpster? What action should I take now?
First you should demand the seller to compensate what you put in so far. If they will not give in, you should take them to court.
What does your contract with the seller says?
I am not trying to deter you from going to court, but it is highly unlikely that any judge will force someone to sell you the property. This is called a suit for specific performance. They are almost always settled before going to trial. If the seller doesn't want to sell, there isn't much you can do to force him. But I would certainly try to collect what you have spent. This should be very possible.
What was the close date on your contract? Definitely talk to a lawyer that represents you. File a Memorandum of Agreement and maybe a a Lis Pendens if it looks like he is wiggling around. This might get him to honor his word. At least you will be kept up to date on what is going on with the property.
JohnCl
[ Edited by JohnCl on Date 11/23/2004 ]
I don't want to force the seller to sell. However, I don't want to lose the money I've invested:
$1,000 earnest money
$350 builder's risk policy
$350 appraisal
$240 dumpster rental
Also, I feel that I deserve some type of explanation.
The original closing date was November 29th. Then it was changed to the 23rd, per the seller’s attorney request. The sellers have moved out of state. Their attorney is handling everything; however, he insists that his is not fully aware of the reason why the seller no longer wants to close.
Yhagood,
Lets turn this around and say How would the seller react if on the closing date you were the one who decided that you did not want to close ??? He/she would be pretty pissed off, im sure. I hate the courts but had I been in your shoes I would immediately have started a lawsuit. That usually will light a fire under their ass to get this deal done. and I completely disagree with anyone else who says their isnt much the courts can do. If that were the case why even enter contracts if they are unenforcable in a court of law ? Go after this seller HARD.
Quote:
On 2004-11-23 22:40, gobriango wrote:
Yhagood,
Go after this seller HARD.
I AGREE
in court he would alest be forced to refund your d/p....km
I finally know what's going on. The seller has decided to back out the deal because he's not happy with the amount of money he's getting.
Here are the details:
asking price: $49,900
I offered: $41,000
Seller countered at $42,500 and I accepted
I accepted his counter offer on October 17th. Now, the day before the closing he decides that he's not getting enough money out the deal. Now, I'm pissed. I do intend to take this guy to court.
I would file a Lis Pendens to cloud the title.
I would talk with my attorney, and have them send a strong letter to seller explaining that she is looking at covering ALL of my expenses, including my attorney fees, which by the way have already started with this letter.
I notice that some of the advice you;'ve got says seller can't be made to sell.
That's nonsense, as a Suit for Specific Performance could be brought to force any seller to follow through on whatever he's contracted to do in a P&S Agreement, if it was truly a legal contract...with Offer, Acceptance and Consideratin all being present.
Whereas a Buyer is rarely taken to court and forced to buy*, it's quite common for a Seller to be foreced to follow through with a sales agreement.
*reason is there's an infinite number of potential buyers out there for any RE, but for the jilted buyer, that's a unique piece of ground and NOT another property in the world just like it.
Also, if you were odered to buy, but then don't do it, how is it really practical for any court to stand over you with a club and force you to go get a loan, etc...absolutely and totally impractical and unenforceable.
So defaulting buyers walk away all the time, and that's exactly why a healthy "earnest money" payment is required by a knowledgeable seller....so WHEN the buyer walks, the seller can just keep the earnest money.
Almost everything posted here is just looney except for John's post.
Your purchase agreement tells you exactly what you will be able to recover. It all depends on how it is worded. Does you state have a standard real estate contract that realtors use? Did you use it? Did you supply the contract, the seller? If it was a standard real estate contract they are usually written to protect the seller so you dumpster and insurance fees would end up being written off to a learning experience that everybody in real estate should know which is never spend a dollar on a house until after closing, or understand that there is always a remote chance that you are risking those funds because there is always a gamble that the deal with not close.
This is in response to the The-Rehabinator’s post
I used a standard real estate contract.
Also, in Harvey, IL a “point of sale inspection” is done before any house can be sold and if the
City Inspector decides that work needs to be done on the property, before transfer stamps can be
purchased the buyer has to provide proof of having paid to rent a dumpster.
Therefore, that is why I paid to rent the dumpster the morning before the closing, so that transfer stamps could be purchased the day of the closing.
Also, since I could not pay for the insurance premium at the closing, I paid for it the day before.
I was told at 7 p.m. the night before the closing that the deal was off.
Lastly, I was just told by my hard money lender that I will have to pay a 2% loan cancellation fee.
Yhagood
A holiday in here isn't helping you time wise but you stated you were originally to settle on the 29th. What's the last day to close per your contract? Even though you were scheduled on the 23rd he doesn't HAVE to close then if the contract has a different date to settle by. Hopefully, your lawyer will convince his lawyer to convince him to show up and settle as agreed pursuant to the contract.
While I'm not technically sure (that's where the lawyer comes in), you might have to have a settlement scheduled and be sitting at the table waiting for the guy to show up to show in good faith you were ready, willing and able to close.
Also our local contract has a dollar amount we fill in as to what seller & buyer agree to as liquidated damages in the event the other fails to perform.
The orginial closing date was the 29th. The seller's decided to close sooner, on the 23rd, which we agreed to verbally.
We had the time and date scheduled with the Title Company. However, I'm being told that they no longer want to close at all. I've contacted my lawyer and was told that after the 29th I can pursue the seller's for non-performance.
Yhagood
Regarding $350 builder's risk policy, do you think you can cancel the policy and get money back from the insurance company. I would think you should be able to.
About earnet money, if there were selling agent and/or listing agent invloved, talk to the agents, and try to get the money back. My question is who cashed the earnest money check??
Regarding $350 builder's risk policy, do you think you can cancel the policy and get money back from the insurance company. I would think you should be able to.
About earnet money, if there were selling agent and/or listing agent invloved, talk to the agents, and try to get the money back. My question is who cashed the earnest money check??
I called my insurance broker and was told that I could not cancel the policy. I spoke with the listing agent and she is upset that the Seller is trying to back out of the deal. She stated that he must follow through with the contract or she is going to hold him liable.
quote:
I called my insurance broker and was told that I could not cancel the policy. I spoke with the listing agent
Reply:
I don't understand why you cannot cancel it. If you don't buy the property, you have no legal rights or responsiblities with the property. So, why should you still keep the insurance? What a rip off! So, if something happenes to the property while the seller or somebody else who will buy the property are living, you are going to get compensated for that. It does not make sense. If I were you, I would talk the insurance compnay that issued the policy, not the insurance broker.
Since the sellers have already vacated the property, I would go after them in court. Does your purchase contract have an arbitration clause? If so and you initialed it, you'll have to go thru arbitration first.
Yes, you can cancell your insurance and I would be suspect about paying a 2% cancellation fee to the hard money guy. A reimbursement of costs (if he paid for an appraisal, prelim, etc) is appropriate, plus about 1/2% cancellation fee.
You also have an agent and I would be all over her to do the bad-guy work on this. Also, has she provided you with a written cancellation request?
Also, the original closing date is the only legitimate date since it's in writing. So as of now, they are still holding up their end of the bargain.
WE thought we were going to have to do this on the properties we just bought...but the sellers finally followed through.
Have an update?
Mal
I last spoke with the listing agent on Monday and was told that the Seller will be ready to close next Tuesday.
Good Luck to you. It makes no sense to delay a closing on a vacant house. About a lawsuit I have been told many times before don't file suit the day after closing make it look like you made a good attempt to work things out n your own.
My lawyer is on a cruise and she called me today and asked that I contact the seller's attorney to confirm the closing on the 7th. The seller's lawyer was very rude and nasty, stating that I should not be calling him and that he was only to speak with my lawyer. Lastly, he told me that we would probably not close on the 7th because the seller had surgery this week.
I'm not sure why the seller having surgery affects the closing, since the lawyer has “power of attorney” and the seller lives in another state and does not plan to be present at the closing.
There has been no explanation given for why the seller decided not to close on the 23rd. Also, the seller is leaving all of his furniture and other belongings in the property. Everything is the house is worthless and should have been disposed of years ago. So I'm going to have to bear the expense of having someone clean out the property.
Most of the work needed on the property is on the exterior and my contractor needs to do the work before the weather gets bad. My hard moneylender only offers a 4-month term so there's no time for the property to sit vacant until the spring. At this point, I think I should just ask for my earnest money back.
I will not be able to speak with my attorney until Monday morning but at this point I don't want to proceed. No reasons are being given for why we have not closed, other than the seller is not ready to close. I made an offer, he countered and I accepted his counter offer. I will not consider changing the purchase price at this point.
Having read through all these replies, my suggestion would be to get your money back, and walk. You've wasted a lot of time on this obviously unmotivated seller, so now you need to cut your losses, as it were, and move on. It'd have to be a heckuva deal to make it worth all this crap you're going thru...
Just my 2 cents worth. In addition, I would ask the seller to reimburse you that 2% you have to pay to the hard money lender. Write up a letter letting him know what you are expecting him to pay and reimburse you for. Let him no in no uncertain term that you expect him to reimburse you. That may change his mund about welshing out of the deal. If he doesn't take him to small claims court
Good luck
Just wanted to let everyone know that I finally closed on the property.
Thanks for the comments,
Yaisa
Yaisa-
Read this thread with interest. Did you find out what made the seller back out?
<p>
Also, did you get what you wanted?
Quote:
On 2004-12-26 15:18, Yhagood wrote:
Just wanted to let everyone know that I finally closed on the property.
No I never found out why the seller was trying to back out. All I know is what I was told by the Seller Lawyer and that is that the owner is an 85 year old lady who is sick and hard to deal with at times. However, I never met her. Due to her age, I did not ask for anything.