Buyer Backs out 1 week before closing???

[cindylou]

What is the name of your state? FL
We are selling a home in Florida and we were supposed to close beginning of next week, when our agent calls us last night and says the buyer's financing did not go through. We accepted the offer about 1 1/2 months ago. We have a signed contract that is contigent upon financing although the sellers broker states that he cannot get financing without 30% down since he is an investor. I guess my question is... since the contract states that it is contingent upon his financing, does it matter whether is an investor or has to move in the property(if that's what need be).
Also, this is not a case where the buyer is legitimately wanting the property is backing out on purpose. We believe he has called is broker and told them to back out. Today he told us he would go ahead and buy the property if we would take $25K less. How can he even say that?

[tdant]

He can ask you to lower the sale price easy...the reason why he is an investor and investors always look for the most house for the least amount of money. all real estate contract are contingent on getting the loan it can fall through at any point in time up until the papers are signed. i mean if you need the money and can take the loss??? at this point in time the ball is in your court you can take the money or not.

[pojo2]

all real estate contract are contingent on getting the loan

Not true!

To the OPer If the contract is contingent upon financing and the details are not spelled out example loan at a certain percent of interest etc then you are out of luck unless you can prove your theory he called his broker and told them to back out.

[cindylou]

Originally Posted by pojo2

all real estate contract are contingent on getting the loan

Not true!

To the OPer If the contract is contingent upon financing and the details are not spelled out example loan at a certain percent of interest etc then you are out of luck unless you can prove your theory he called his broker and told them to back out.

I'm afraid I don't understand the part about if the details are not spelled out, so if there not spelled out and he doesn't get financing his way(whatever way he chooses) than we are out of luck, is that what you mean? And as far as the broker, I think we are propably out of luck there too, since the privacy act is going to cover any info they release.
What seems apparent to the agents and myself is that if he can come up with the 2nd figure he offered us than he can come up with the origional negotiated price. Thank You for Your Help and any more advice you may have

[pojo2]

Originally Posted by cindylou

so if there not spelled out and he doesn't get financing his way(whatever way he chooses) than we are out of luck, is that what you mean?

Yes, as long as there is a generic financing contingency listed on the contract.

Has your agent received a letter from his financial institution saying he can not get the financing? Ask her to obtain one as proof. I would never sell it to this buyer and let him/her get by with this 25K reduction. Does he or she have you over a barrel and know it? Don't give in to trickery.

[tdant]

here in Ga most like 99.9% of all contracts are contingent upon financing. It is usually spelled out like buy has XXXX amount of time(days) to obtain financing at no more then XXX%. did he give you a pre approval letter? If a person cant get the loan how are they going to pay for the house?????? What about their earnest money? If he can get a loan and it if not spelled out the terms or % and he says that the rate is to high and want to back out then he might lose the earnest money but the broker and the commision have the last call.

[cindylou]

Well we are definately not going to sell it to him for 25K less. He did put 5k down as earnest money and or agent is not going to release that money to him, from our understanding he can fight to get the money back although it is going to cost him alot of time and money.
We believe that he is ruthless and has planned this all out in hopes that we would have already spent the money and sold all furnishings from the house so we would be in a position that when he came back and made us the 25K less offer we would have to take it.
Fortunately that is not the case.

And yes he did have a pre approval letter from the same broker that turned him down for the loan. And he had also already put 15% down to the broker and apperently the broker said it had to be 30%. We were even going to offer to loan him the differance on contract, but I don't think that's what he wants anyways.

[pojo2]

If a person cant get the loan how are they going to pay for the house??????

Cash, relative, contract for deed, land contract, rent to own etc.

[tdant]

OK I guess i should have typed if a person cant get the money. how are they going to pay for the house I know that there are many creative ways to get a house.

We believe that he is ruthless and has planned this all out in hopes that we would have already spent the money and sold all furnishings from the house so we would be in a position that when he came back and made us the 25K less offer we would have to take it.
Fortunately that is not the case.


Spend what money????? the earnest money????

[pojo2]

You have no case to keep his earnest money if indeed there is a financing contingency but the terms are not spelled out in detail.

He did put 5k down as earnest money and or agent is not going to release that money to him, from our understanding he can fight to get the money back although it is going to cost him alot of time and money.

In addition what is the small claims limit in your area, if it is 5K it will cost him about 50-100 dollars.

Those are the breaks when selling and buying real estate so you have a choice accept his offer (when hell freezes over) or move on as quickly as possible.

Oh and when looking for a place to place some blame look your agent in the eyes because they did a lousy job of protecting your interests with an open ended financial contingency.