real estate contract

[NYDST5611]

What is the name of your state? NJ I'm a seller entering into a contract. In the past, I've had a clause added to real estate contracts (this was in NY & was as a buyer & as a seller) that says the buyer will forfeit their deposit if they walk away from the deal for any reason other than being denied a mortgage. The few NJ attys I've spoke to say the buyer's counsel will reject this demand and it will become very time consuming (lot's of letter writing, etc.). Some of the attorneys I've talked to even suggested working on an hourly rate. It doesn't seem so unreasonable to me considering I would be taking the house off the market & paying taxes, fuel & utilities. I would appreciate any comments.

 

[Ohiogal]

Yes as a buyer's counsel I would most definitely fight this. Because there are other reasonable reasons why a sale would fall through -- other contingencies that make sense -- such as the house doesn't pass inspections or the inspections reveal repairs necessary in an exhorbitant amount or the buyer's home doesn't sale and can't sale and therefore they can't afford to pay a mortgage on two houses or you decide to back out of the sale (hey there is NO PROTECTION for the buyer if you get to keep the deposit except if they can't get a mortgage).

 

[nextwife]

Yes as a buyer's counsel I would most definitely fight this. Because there are other reasonable reasons why a sale would fall through -- other contingencies that make sense -- such as the house doesn't pass inspections or the inspections reveal repairs necessary in an exhorbitant amount or the buyer's home doesn't sale and can't sale and therefore they can't afford to pay a mortgage on two houses or you decide to back out of the sale (hey there is NO PROTECTION for the buyer if you get to keep the deposit except if they can't get a mortgage).

Absolutely! Then there are title issues, such as a deed restriction, easement or ROW, setback line that they don't discover until you deliver the title report. What if that means they can't put in the fence/pool/shed/future house addition/deck or whatever that is part of their buying plan? THey should have every right to cancel, WITHOUT loss, if the title search results in problematic issues for them.

 

[NYDST5611]

O.K., I got to say you both make good points that I'd have to agree with. But, I'm talking about when a buyer decides to back out for no good reason - they just changed their mind. Maybe you're right, but I just don't get it & am trying to understand it; why is it in NY contracts? I know it was in both of mine (when I sold & when I bought a home). And, recently friends of mine got to keep down payments (of approx $10k) from 2 different buyers (1 buyer walked on the deal & went back to their country - not sure what the other story was). I guess they could have elaborated on their story, but that seems like a pretty weird thing to do. And, what about the seller having to pay taxes for a longer period of time by waiting 2 months to find out the buyer wasn't serious & then finding themselves in a difficult time of the year to sell a house? Is there no compensation for that? The property is unoccupied so I'm paying taxes in addition to my own house - it's not like I'd have to pay taxes anyway.