I sold my Condo - Buyer wants extension on closing

[abridgel]

I will try to give you guys the coles notes version on my condo closing.

Basically we sold - buyer wanted a quick closing date (less than 2 weeks from when we signed). My wife and I agreed - get our crap together and move out.

2 days before closing now the buyer wants a 1 week extension. I contacted our lawyer and he said that the buyer should put down another 5K and have it non-refundable (incase the deal doesn't close).

The deal from my understanding is firm. If the buyer would back out would it make sense to sue him? Or would it not be worth it?

Anyone else been in a similiar situation?

It all seems very sketchy to me as the buyer is putting down less than 5% and is looking for approx $240K mortgage on 1 income.

[speedyforme]

In my situation, the seller was buying a new build and I was notified that there may be a delay. I told him upfront I was flexible (making me the best buyer) but that it just so happens that the delay would land at a time when I was out of the country. We kept in contact ever since I signed the papers and as soon as the deadline for any delays passed, I would be notified of a delay or not. Luckily there was none.

It just seems that to not have the buyer tell you anything upfront before buying is strange.

I would guess on the buyer's financial situation but if your lawyer says so, it's probably best.

[abridgel]

its all very wishy washy - my real estate agent is actually advising me to give the buyer total flexibility

My lawyer is a straight shooter and advises the buyer to put up or shutup. Basically if the buyer really wants the place put down some more money so we have peace of mind that we have a sale.

[speedyforme]

well the papers are signed so either way the house is the buyers

and your RE agent will tell you to be flexible because they don't want anything to fall through

your lawyer is right, it's up to you now to decide what to do

personally, I think the buyer is serious and maybe needs more time to finalize financing so maybe asking them to put more money down will just make it worse?

I know when I was closing, I scrambled so much in the last 3 days because of issues with my lender and my lawyers office...such a mess, luckily it all worked out though ;)

[felix2000]

We had some similar problems when trying to buy a home. We though everything was in order but last minute bank/clerical errors made us need extra time. If your still happy with the arrangement of the sale I say agree to the extension. The idea of additional non-refundable deposit makes sense.

[canehdianman]

I will try to give you guys the coles notes version on my condo closing.

Basically we sold - buyer wanted a quick closing date (less than 2 weeks from when we signed). My wife and I agreed - get our crap together and move out.

2 days before closing now the buyer wants a 1 week extension. I contacted our lawyer and he said that the buyer should put down another 5K and have it non-refundable (incase the deal doesn't close).

The deal from my understanding is firm. If the buyer would back out would it make sense to sue him? Or would it not be worth it?

Anyone else been in a similiar situation?

It all seems very sketchy to me as the buyer is putting down less than 5% and is looking for approx $240K mortgage on 1 income.

What your lawyer suggested is the common way of dealing with the issue. Sellers get leery when buyers ask for extensions. A non-refundable deposit of 5k invests some actual $ of the buyers and allows him to show you that he is serious about the purchase, he just needs more time.

Was there a financing condition on the sale? If so, then you haven't sold the condo at all. If there are no outstanding conditions, and the buyer backs out then you get to keep his deposit and could technically sue him for the difference between what he was going to buy it for and what you do eventually sell it for (it must be a bona fide sale however, you can't sell it to your cousin for $5). It wouldn't make any sense to sue him until you are able to sell your condo, as then you will know what the range of damages might be.

[Hot Ice]

Go with your lawyer, ask for another non refundable 5K deposit. If the deal falls through, you get to keep the 5K.

[Salamander Pete]

The realtor will get commission only upon closing, and the reality is that a difference of 5K or even 15K is not going to make much of a dent in terms of his/her commission, so the realtor's interest is vested in getting you to put up with the buyer's demands so the deal closes.
To the poster who said the house belongs to the buyer, that is not the case until the deal closes, and the full amount has exchanged hands.
There is no real indication the buyer will back out, based on your description, even if he has asked for an extension. But if this does occur, there should already be a provision in the agreement on the deposit placed with the offer, to account for the time spend on reviewing the deal, and the time lost by taking the property off the market. If there is none, than maybe the 5K deposit applicable towards the balance of the house price might be a show of good faith, but asking for an additional 5k can be perceived as greedy and would turn personally turm me off a property.

[abridgel]

There were a few conditions on closing

1) Review of Status certificate
2) Finance waiver for Buyer

RE Agent has advised the waiver for financing has come through. The buyer's lawyer waived the right to review an up-to-date status certificate since this is a very new condo and agreed to review the status certificate that we had (which was a month old)

The 5K extra we asked for would go towards the purchase price but if the buyer cannot meet closing the extra deposit plus the initial would come to us (a total of 10K).

The only fishy thing is that the brokerage company that is representing us wants to hold all the money. I've also heard that even if the deal doesn't go through that they want a part of the deposit (which makes no sense).

My lawyer advised that once the buyer provides an additional 5K deposit that the brokerage should release the current deposit (5K) that they are holding now.

[gr8dlr]

Firstly, since you're already out of the condo, then this delay will cost you money...so I would ask for something as a minimum which is non-refundable (compensates you for lost interest)

Secondly, you're paying for a lawyer...take their advice.

[HeyAddy]

There were a few conditions on closing

1) Review of Status certificate
2) Finance waiver for Buyer

RE Agent has advised the waiver for financing has come through. The buyer's lawyer waived the right to review an up-to-date status certificate since this is a very new condo and agreed to review the status certificate that we had (which was a month old)

The 5K extra we asked for would go towards the purchase price but if the buyer cannot meet closing the extra deposit plus the initial would come to us (a total of 10K).

The only fishy thing is that the brokerage company that is representing us wants to hold all the money. I've also heard that even if the deal doesn't go through that they want a part of the deposit (which makes no sense).

My lawyer advised that once the buyer provides an additional 5K deposit that the brokerage should release the current deposit (5K) that they are holding now.

This has been happening a lot recently with the tighter credit crunch. The buyer might be having issues securing a mortgage on the property. I've had the issue where buyers had a commitment letter and the mortgage got declined two days before the closing.

Best way to deal with it is to be flexible and ask for a bigger deposit. Also, if you've already purchased another place, you can also ask for them to be penalized for undue hardship. The extra still doesn't go directly to you as it's a complicated issue. You have a right on the money which you have to fight to get to.

I'm not a lawyer so it's best to review this in further detail with your lawyer.

In regards to your deposits, they are ALWAYS held in trust either with the listing brokerage or a trust account for a lawyers that both parties agree to.

[sunnybono]

its all very wishy washy - my real estate agent is actually advising me to give the buyer total flexibility

My lawyer is a straight shooter and advises the buyer to put up or shutup. Basically if the buyer really wants the place put down some more money so we have peace of mind that we have a sale.

You agents wants his commission!!! If you play hardball, he's going to have to start all over!!!

sk

[coffeeguy]

I can't believe that in this economy you only asked for 5k, when I sold a couple months i wouldn't accept anything less than 40K, It's way too wasy for someone to walk away from 5K and sure you can go ahead and sue but you can not draw blood from a stone.

[speedyforme]

I put 10k for my deposit

[stealth]

Firstly, since you're already out of the condo, then this delay will cost you money...so I would ask for something as a minimum which is non-refundable (compensates you for lost interest)

Secondly, you're paying for a lawyer...take their advice.

+1
nvm what the agent says, he's not the one being inconvenienced by this change of plans.

[coolspot]

The only fishy thing is that the brokerage company that is representing us wants to hold all the money. I've also heard that even if the deal doesn't go through that they want a part of the deposit (which makes no sense).

Doesn't the brokerage always hold onto deposits?

When I placed the deposit, I paid the brokerage. The house itself, I paid my lawyer in trust.

I can't believe that in this economy you only asked for 5k, when I sold a couple months i wouldn't accept anything less than 40K, It's way too wasy for someone to walk away from 5K and sure you can go ahead and sue but you can not draw blood from a stone.

I put as little deposit as possible when I bought my place in January, only 15K. Goes both ways, buyers know sellers must sell, so why give them more money than needed.

[Cheap Cat]

Two weeks is a really tight closing. When I bought, I did 4 weeks and it was the most stressful 4 weeks of my life. I couldn't sleep with my head spinning with all the things I needed to do. Depending on where the down payment is coming from, the buyer may need time to get his money together. I was putting a large down payment down and it took time getting all the money transferred to my account so that I could get the bank draft to the lawyer. Fortunately, I have no holds below each $20,000 deposit but it was still an issue for me having to split deposits. Some people have all deposits held for 5 days before they can access the funds. This could be the problem. I say take the $5 k deposit and give the guy another week.

[JWL]

Getting an additional deposit is a good idea.

Forcing him to honour the original date will only be in your best interests if it works. Waiting another week to complete the sale of your house shouldn't be a big deal unless you need the funds to close on a house you've purchased.

I expect that the last thing you want to do is put it back on the market and try to find another buyer.

But I imagine it is pretty annoying since they wanted a fast closing and then effectively changed their minds.

[realestateguy]

Brokerage always holds the deposit.