Had deal in place for condo...buyer signed contract then backed out...need advise?

[Mike71]

I had my condo up for sale and received an offer on it. Through my and the buyers agent we negotiated a price and signed a contract on the offer stating the only conditions were the buyer getting financing from the bank (I was told they were pre-approved already) and myself (seller) getting them some condo documents. I met my part of the conditions and we sent the buyers agent all documents they requested. Apparently an issue came up regarding the condo bylaws that it is an over 30 only building and the buyers agent claimed they were not aware of it. The thing is though my agent and I advertised that in all the advertising we did for the property and also my agent specifically told them more than once that it is an over 30 building. So we wait for a week while the property gets switched to "pending" on MLS and no-one is calling about it. On monday we get a call saying that they were unable to get financing from the bank and the deal is off. My agent and I are certain that it was the over 30 issue but they knew they could not back out of the contact for that reason. Does anyone know if they have to legally provide us with documentation saying they were not able to get the financing? The interesting thing is right after they backed out of our deal the next day they purchased another very similiar place in the same price range and magically they got approved now. If anyone who is familiar with real estare law can let me know if I have any legal ground to stand on as far as suing them or anything that would be great. Basically they cost me about 10 days of showing my place and possibly other potential buyers. Also because I thought the deal was going through I started to pack everything and the place looks like crap now so I have to get it back up to show condition ASAP. I would be interested to hear about other people's opinions on the issue. Especially anyone with real estate knowledge. Thanks guys.

[Hubster]

Those conditions and clauses are there exactly for one reason - to protect the buyer. I have seen many instances where the buyer uses the financing clause (or the home inspection) to get out of a deal they are having second thoughts about.

You have no recourse. As a broker I can tell you that "turn-downs" are not always in writing. It could have simply been a matter of the client not being able to provide adequate documentation so the application dies. If it did infact die, which I doubt. But you have no way of proving this.

My advice is to move on as quickly as possible. I know it is painful. :(

One question though: why were you not continuing to show your place while this "conditional sale" was still open? :confused:

The agent should not remove the listing nor prevent people from viewing your home until it is sold FIRM, meaning all clauses or conditions have been met and waived. Certainly it is the agent's responsibility to mention that you do have a "conditional" sale pending, but this does not stop others from viewing and/or making offers - unless they decide to do just that. I think a discussion with your realtor should be your first action.

Best of luck,

H.

[simms]

First sign of housing market corrections? I hope not.

Good luck with your sale...

[grant]

First sign of housing market corrections? I hope not.
The OP already explained he is confident it was really unhappiness about the bylaws.

I agree your agent should have advised you not to pack up til the sale was firm. something like 25% of offers do not have subjects removed.

Your buyer basically took advantage of whim & fancy clauses in the contract to back out. It happens! Personally having been on both sides of the deal many times, I understand that buyers may have regret after thinking about it for a few days. I'd just let it go and concentrate on finding a buyer who will truly be happy with their purchase.

[Neil]

You're probably right, it was some reason other than obtaining finances.

But the finance condition can be as simple as the buyer not feeling like they want to borrow the money, regardless of the lender's actual approval or disapproval.

Probably best to move on. Maybe there's some recourse in the deposit, not sure about that though.

[ullyeus]

But the finance condition can be as simple as the buyer not feeling like they want to borrow the money, regardless of the lender's actual approval or disapproval.


Exactly, even if they got approved for financing they can say it's a problem they didn't get 1% financing.

[mangotango]

The "conditional upon financing" clause is routinely used to "get out" of a deal. However, technically it all depends on the actual wording of the financing clause. If not drafted properly (90% are not) the vendor can hold the buyer liable. However, only in the rarest of cases would bringing a suit be reasonable. The cost and time involved would be prohibitive. Let alone proving your actual damages. The only ones that will "win" would be the lawyers.

[knapper]

Does the condition read to the effect of "buyer's ability to get financing" or "buyer's ability to get financing satisfactory to the buyer"? The first is what I would guess mangotango was referring to where the vendor can hold the buyer liable, but it would be difficult to prove. If it is the second one, you are simply SOL, buyer can say they would have only been 'satisfied' with 2% financing...

[Atomic Chip]

Let's assume for the sake of argument that you could persuade a Judge that the purchaser is in breach of contract (through backing out of the deal for an illegitimate reason). What are your proveable damages?

Basically they cost me about 10 days of showing my place and possibly other potential buyers.

Who knows if the place would have actually sold if it had been actively listed during the 10 days when it had "pending" status on MLS? If it would have sold, who knows for how much? Bear in mind that as the plaintiff, you have the burden of proof, on a balance of probabilities. Most judges will not be much interested in mere possibilities.

Also because I thought the deal was going through I started to pack everything and the place looks like crap now so I have to get it back up to show condition ASAP.

Unfortunately I don't think that you will get much sympathy from the Judge, who will probably say that this sort of inconvenience is simply 'part of the territory' when you are selling a residence.