Seller and buyer in default...

What is the name of your state? Texas
I am a Realtor and represent the buyer. We wrote a contract and the deal was supposed to close June 30th. My buyer ran into a last minute snag with the lender the day of closing and they want an additonal $20,000 down. My buyer is pursuing that but it will be at least 3 weeks before he gets the money. This home was contingent on the sale of another home and on financing. The other home sold and closed. The financing was approved (I have letter from lender) until the day it was to close and then they would not release docs without more money down. The seller is in another country and we have not been able to reach them nor have they even contacted us to see if the deal has closed, and it has been 9 days since it should have closed. Twist to the story: it is our office's listing so my broker has the listing and I represent buyer. I asked to do an extension and my brokers assistant (a licensed agent) told me not to worrry about it, it is more for the sellers protection and they haven't been able to reach the seller (so obviously the seller doesn't seemed concerned or anxious). My thought is the house is going into foreclosure. Here is my question....I want to leave this broker and go with another. I do not have a signed buyers rep agreement with my buyer and the contract is expired. Does this mean it is not effective nor enforceable by the seller or my broker? Can I leave, go with another broker and have my buyer sign a buyers rep agreement with me and my new broker and have no legal ramifications since both buyer and seller are in default? My buyer is not even really attached to this home and may seize the opportunity to find another one. Are either my buyer or me at risk since neither party closed and both are in default?

[HomeGuru]

Originally Posted by luvintex

What is the name of your state? Texas
I am a Realtor and represent the buyer. We wrote a contract and the deal was supposed to close June 30th. My buyer ran into a last minute snag with the lender the day of closing and they want an additonal $20,000 down. My buyer is pursuing that but it will be at least 3 weeks before he gets the money. This home was contingent on the sale of another home and on financing. The other home sold and closed. The financing was approved (I have letter from lender) until the day it was to close and then they would not release docs without more money down. The seller is in another country and we have not been able to reach them nor have they even contacted us to see if the deal has closed, and it has been 9 days since it should have closed. Twist to the story: it is our office's listing so my broker has the listing and I represent buyer. I asked to do an extension and my brokers assistant (a licensed agent) told me not to worrry about it, it is more for the sellers protection and they haven't been able to reach the seller (so obviously the seller doesn't seemed concerned or anxious).

**A: what the heck are you guys smoking? You should know that if the contracted closing date has expired, then you need an extension IN WRITING signed by both parties.
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My thought is the house is going into foreclosure.

**A: don't think, confirm this.
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Here is my question....I want to leave this broker and go with another. I do not have a signed buyers rep agreement with my buyer and the contract is expired. Does this mean it is not effective nor enforceable by the seller or my broker?

**A: No. The contract remians enforceable unti such time as it closes or there is a mutual termination and release signed by both the Seller and Buyer.
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Can I leave, go with another broker and have my buyer sign a buyers rep agreement with me and my new broker and have no legal ramifications since both buyer and seller are in default?

**A: see above.
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My buyer is not even really attached to this home and may seize the opportunity to find another one. Are either my buyer or me at risk since neither party closed and both are in default?

**A: what? Go have a long talk with your principal broker.

But aren't BOTH parties in default? How could the seller go after the buyer when even the seller didn't close because nobody could contact him? Even if we would have closed, the seller wouldn't even know that 10 days after because they have not made any contact with title company or listing agent. Both parties dropped the ball, so can't buyer just walk away...contract is expired...

[HomeGuru]

Originally Posted by luvintex

But aren't BOTH parties in default?

**A: No, only the Buyer is in default for failure to close on the stipulated date due to the financing problems. The Seller was ready to close.

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How could the seller go after the buyer when even the seller didn't close because nobody could contact him?

**A: if the Sellers left the state, they most likely pre-signed all the closing docs so their physical presence was not needed to close the transaction.
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Even if we would have closed, the seller wouldn't even know that 10 days after because they have not made any contact with title company or listing agent. Both parties dropped the ball, so can't buyer just walk away...contract is expired...

**A: this depends upon the financing contingencies stated in the contract.
It appears that you need to sit down and have a long talk with your principal broker. And take notes this time.