Buyers cold feet

[longsally111]

What is the name of your state? South Carolina
We put our home on the market, we had 4 showings in 3 weeks and got an offer. The offer stated that we had to be out in 3 weeks by the 15th of November. We agreed on a price, they signed the offer, we accepted it and they gave an ernest money check.
The next day (today), I get a call that the people feel "rushed". I got angry. They saw the house, made an offer gave ernest money, want us out in 3 weeks and now they feel rushed? I told my agent that it was a done deal as far as I was concerned as they signed the agreement and gave the money. Can they just back out now? What happens to the Ernest money they gave?
What are we supposed to do now? Because of this, we put in an offer on another home and we are calling that agent telling them to hold off giving it but it may be too late. What a mess.

 

[danno6925]

Inform your agent that you will continue to move forward, and that if the buyer intends to back out, you will definitely want earnest money along with their notice of cancellation.

Can they just back out now?

They sure can, but they would most likely forfeit their earnest money deposit if/when they do. That's why the deposit is usually a large sum - so it will sting like hell should they decide to back out of the deal.

What happens to the Ernest money they gave?

Buy yourself something nice with it - I'm thinking hot tub in the new house

What are we supposed to do now?

Immediately contact your realtor concerning the purchase of your next home. Try to negotiate with that seller and let them know you still want their house, but that you had a nimrod try to buy yours.

Because of this, we put in an offer on another home and we are calling that agent telling them to hold off giving it but it may be too late.

Did you place a deposit on the home? If not, you're not yet obligated by that offer to buy. Have your realtor negotiate with the sellers and see if you can't come to an agreement concerning the sale of your home and the purchase of theirs.

 

[longsally111]

Update

This is very interesting I thought.
My real estate agent and their company do NOT have the ernest money check. The buyers agent still has it. My agent e-mailed her and told her that it had to be in her possession by end of business day tomorrow for deposit. The woman did NOT respond to her.
In the event that the check is not turned over, what happens then? Can she just return it to the people? Can they cancel the check? By the way, thank you for the information. I already have a hot tub but will put the money towards a christman vacation at Disney we are planning.
Do I continue to proceed as if we are selling and leaving in 3 weeks? Our agent told their agent to come by tonight and see the house again, to make them feel MORE comfortable with their decision to buy. It is 7 pm and I have not heard one word. I think these people must be INSANE.

 

[ajkroy]

earnest money

If the buyer's agent turns over the check, I just wanted to add that you need to read your contract with your real estate agent...most likely, you are obligated to split that earnest money 50/50 with him/her. It is what happened to us. They actually do a lot of work to get the paperwork and contracts signed, so I think it is reasonable.

Maybe take him/her to Disney with you, instead?

 

[onthelakeinnc]

The agent cannot return the earnest money check to thier client/customer unless it is agreed to by both parties once you have a signed delivered contract. Did the other agent fax a copy of the check with the offer? You need to decide if it is worth fighting for or cutting your losses and marketing your home for sale. There are several contingencies in the contract that make it very easy to get out of a contract in SC. Your agent needs to contact the other agents BIC if he/she cannot get any where with the other agent. BTY a real estate contract is enforceable in SC with or without any earnest money listed in the contract. On the offer you presented for the other home. Your agent can call the agent and let them know that you are pulling it if it has not been agreed to, signed and delivered.

 

[LSCAP]

OFFER- Contract

Maybe different states, different laws.

You said “they signed the offer”.
When I was in Real Estate,In NY, we made it clear, it was an “offer” not a contract.

For the buyer it proved they made of offer on stated date, and it was accepted. Which reduced the chance of bidding wars.
For the seller, if protected them from someone claiming a verbal agreement, for less, at an earlier date.
You said:
They made the offer one day and wanted out the next. How would you feel if they waited a week, or stalled for a month, and then wanted out.

I’ve seen things like this take months to settle. Meanwhile you can’t really sell it, if prospective buyers know you are in court.
Plus you may make it harder to sell, when other agents hear about “rumors” that you were too anxious. (thinking something might be wrong with the house.)

I had a case where the buyer stalled for three months clearing out Judgments against himself, meanwhile he had told the tenants renting the house, that they might as move out, as he would be in, in a month. The seller lost three months rent. ($4500.00 dollars)

 

[longsally111]

The agent cannot return the earnest money check to thier client/customer unless it is agreed to by both parties once you have a signed delivered contract. Did the other agent fax a copy of the check with the offer? You need to decide if it is worth fighting for or cutting your losses and marketing your home for sale. There are several contingencies in the contract that make it very easy to get out of a contract in SC. Your agent needs to contact the other agents BIC if he/she cannot get any where with the other agent. BTY a real estate contract is enforceable in SC with or without any earnest money listed in the contract. On the offer you presented for the other home. Your agent can call the agent and let them know that you are pulling it if it has not been agreed to, signed and delivered.

Update: The contract was signed by them last night and faxed over to my agents office with a copy of the check. Everything is signed and sealed. This, at this time, became a contract, not an offer (from my point of view).
The house is still on the market, we never took it off. The buyers agent suggested to my agent this am that they needed to talk to the bank and crunch numbers and suggested they could not get financing. My agent reminded her that they had a bank pre-approval letter and that on the contract, she did NOT check the box for a contingency for financing. These people also have no home for sale so there were NO contingencies listed on the contract.
On the offer we put down, we put 500.00 ernest money and it was contingent on financing (which we already arranged) and the close of our home. Our agent called that one up and told him what happenned. His clients are now in California and it may take a while to hammer out a deal with them. We are proceeding right now under the assumption that we are out of here in exactly 21 days and need to find a home.
There is NO way that I will agree to give back the money so I told my hubby that atleast we earned some extra smack int he end if we didn't sell.

 

[Ellerge]

BE CAREFUL! You cannot cash a faxed COPY of the EMD!

 

[longsally111]

Final Decision

BE CAREFUL! You cannot cash a faxed COPY of the EMD!

That is true. Agent called this am to say that they are making their decision today and that it looks like they will walk and will fight for the ernest money.. I told her that I would be keeping the ernest money and that the people had 3 choices:
1. Buy the house
2. Walk away and leave Ernest Money
3. Fight for the Ernest money and I will sue them in court for 5% of the price of my home as well as the ernest money, attorney's fees and emotional distress.

In the mean time, The house remains on the market!!! Maybe someone else will want it.
Thanks to everyone for all their help

 

[longsally111]

Help Me!!!!!!!!

The people sent my agent a letter telling them that the contract was not binding and releasing everyone. My agent asked her how it was not binding. The people stated that since they signed it and sent it over, husband signed it and gave it back but our agent didnt fax it back and therefore, it is not bindind. Is that correct? Can this entire thing be cancelled because the signed contract on OUR end did not go back to them again?
The agent DID give the people back their ernest money check. I am in shock!!!!!

 

[onthelakeinnc]

When the buyers agent received the signed contract it became enforceable. Your agent needs to let the other agent know that you will come after them for earnest money that they had no right to return without a cancel of contract and return of earnest money form signed by both parties.

 

[LindaP777]

Better get the buyers RE agents broker involved! He knows the laws and knows he has to keep his agents in line!

 

[efflandt]

"onthelakeinnc" did not read carefully enough. The buyer's agent did NOT receive the signed contract from seller. So from the buyer's point of view, they cancelled before any contract was delivered.

And seller or seller's agent had not received consideration yet (the earnest money), required to bind a contract. So my unofficial thought is that there is no case.
--
Not a legal expert, just business law class 30+ yrs ago

 

[longsally111]

Another Update

My agents broker said that it was only a technicality that the contract they signed had not been sent back. As for the check, their broker had been asked for it numerous times and would not bring it.
I spoke with the real estate commission in this state and when I told the man their reasoning why it was invalid, he LAUGHED!!! He told me to sue the people in small claims for the amount, I am entitled to 3x that so 3,000.00. He also told me that the judgement would be worthless because I cannot force collection from these people.
I then spoke with an attorney and floated the idea that we sue PRUDENTIAL who was the buyers agent. The attorney is looking into it since she is the one who never brought over the check and did not deposit it immediately upon acceptance of the offer. They would pay it or I would then try to get this lady's license suspended or revoked. I am waiting to see what the attorney wants to do. He will let me know by Thursday.
I think I should sue both the people and the agent jointly. I just cannot get over this situation. AMAZING.

 

[longsally111]

Update

Update: Our attorney sent the company a letter demanding the 1,000.00 claiming breach of Fudiciary duty and has given them 10 days to cough up the money or we will sue them in small claims court. I wonder if they will pay.