Buyers Backed Out of Contract Last Minute

[EvilWizard]

What is the name of your state? Virginia

We had a contract with a couple moving from NY to VA. The normal contingencies stipulated within the contract (Inspection, Lender Approval, and etc...) were all met. This couple has strung us along for 2 months now and today right before closing they have decided that they do not want the home any longer. We have the inspection paperwork, approvals from 2 different lenders for them and of course the contract itself.

My question is what type of legal recourse can we take against this couple? If I need to be more specific on anything please just say so and I will be glad to. If all contract contingencies are met and they are simply backing out now because they think they made a mistake would this be a valid breach of contract on their end and what is typically sought after from the seller's perspective in this type of situation? They did put down a $2000 earnest money deposit which we will be keeping as well.

Thank you for your input.

EW

 

[EvilWizard]

I also wanted to add that we do have the letters from 2 lenders stating they have been approved fully for the loan on the house as I see that is sometimes an issue.

 

[John Se]

What do you want from them?

It's usually not likely you are going to "force" them to buy, i.e. sue and win for specific perfomance, that would take Oh 1-2 years, just wont happen, given that what do you want?

 

[EvilWizard]

From what I have read and understand the buyers have breached the contract. What I will be looking for is the buyer to pay the mortgage of the property from inception of contract until another buyer puts down a contract. I also will be looking for the buyer to make up any depreciation of the property (meaning we were going to sell the home for 300k and they backed out and the property sells for 250k to someone else then the previous buyer owes of 50k...)

Our realtor, the lender and the boards here lead us to believe we as the sellers are protected here. The buyers have already started making ridiculous statements such as the lender docs were forged (even though 2 separate lenders approved them and collusion would be pretty damn hard to prove...) as well as just saying God will protect us... I don't want to be a horrible person but having this property off the market for 2 months has been an impact to us and we need to sell it so we can get on with our lives and our new home. I am pretty sure we have a case here but this would be my first true lawsuit against someone and I would really like a knowledgable answer as to whether it would be worth it or not...

If we had to keep the house awhile due to the suit I would be willling to do it just as FYI.

 

[justalayman]

First, the mortgage from inception of contract to closing is yours anyway you look at it. here is no reason to expect them to pay that. Since you recieve the value of appreciation after that point as well and the use of the house, getting ongoing mortgage payments isn';t going to hapen either.

What you should look towards, if anyhting, is a drop in value from when the house was originally contracted to the current time. If there is none, you actually have no true losses. The buyers cannot control what you do with the home from here on out such as not aggressively marketing the house so they aren't going to be held responsible for anything you may be able to influence negatively merely to recieve more money from them.

If we had to keep the house awhile due to the suit I would be willling to do it just as FYI.

Boy would that kill your chances of winning. You voluntarily taking the house off the market kind of blows your concern for a speedy sale.

 

[IndianaOwner]

Yep - it is unfair, but that is how the real estate business is. Your best solution is to get larger deposits down that are not refundable. Once the contingencies are met, we all expect them to make the purchase. You could threaten suit, put pressure on their real estate agent, etc., etc.... But to litigate it is not a fun road and is long and expensive.

Maybe someone else here will have a solution, but I doubt it.

 

[Jaxdd]

Not an attorney here, but in the real estate/title insurance business. Be thankful you will be able to retain the $2,000.00 in earnest money (most I see are anywhere from $200 - $500)....many sellers don't because so many contracts are not specific enough when completed. As everyone stated previously, you still have a home you are responsible for paying the mortgage, insurance and taxas on, which you would have had to do even if the sale had completed. Real estate litigation is VERY expensive and VERY lengthy. The only damages you could have possibly suffered is if the "market value" has dropped in your area so much so that the delay caused the "market value" of your home to decrease dramatically, therefore bringing in a lower offer. If not, then it would be your choice to accept the lower offer. I don't see a 2 month time period doing that. True, what is legal is not always fair and "good faith" is not always practiced when dealing with real estate, but RESPA laws are to protect both parties....which is WHY earnest money is a part of real estate transactions. Good luck to you with your next buyer!!

 

[EvilWizard]

Just to clarify on the hold the house for awhile statement I meant that if we were to sue these people I was under the impression we would not be able to sell the house during that timeframe so I would be willing to take that chance... The other factor is that in the current N. VA market the house prices have been dropping hard here and 2 months can actually make a 10k-20k difference... Thanks for the advice. I am going to pursue legal action against these people for the difference in the price of the house from contract to back out time.

EW

 

[Ohiogal]

First, the mortgage from inception of contract to closing is yours anyway you look at it. here is no reason to expect them to pay that. Since you recieve the value of appreciation after that point as well and the use of the house, getting ongoing mortgage payments isn';t going to hapen either.

What you should look towards, if anyhting, is a drop in value from when the house was originally contracted to the current time. If there is none, you actually have no true losses. The buyers cannot control what you do with the home from here on out such as not aggressively marketing the house so they aren't going to be held responsible for anything you may be able to influence negatively merely to recieve more money from them.

Boy would that kill your chances of winning. You voluntarily taking the house off the market kind of blows your concern for a speedy sale.

If they do sell the house and must accept a lower price than what these buyers are willing to take (or they have to raise the commission offered) then they can sue for that provided they are still trying to sell the house. sometimes getting a lawyer to call the buyers' realtor and stating that since all contingencies are met the buyers must buy or be in breach of contract and facing legal action will force them to close. They may also be able to collect on the mortgage if there was a specified closing date, they turned down other offers on the house because of this contract and they now must carry the mortgage longer and are not living there (have moved or what not). That is a possibility. Not one to bet the farm over necessarily but if they do end up suing when the house is sold something to throw in.