buyer changes from cash offer to lender in escrow.
selling undeveloped residential lot. under contract, with a buyer for a cash offer, no option period. 6 days from closing received an objection letter stating they now have lender and they are objecting to survey that we didn't even have to provide. no 3d party addendum provided. closing date was set in contract and that has now passed. their attorney has not responded to the marked up objection letter from title. looking for insight on options.
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#1 Foreclosures Contributor
- Real Estate Professional
- West Palm Beach, FL
If they found a survey or title issue, it has nothing to do with their financing. I assume, like any other typical contract, it calls for you deliver clear title...which would include no encroachments or other legal issues.
What does your contract state about objections to survey or title matters? Are the objections valid? Are you required to clear the objections? No one here has seen your contract so it makes little sense to comment, but rest assured the answers you seek are contained in the four corners of your contract.
the objections to the title were to certain sections and the title company addressed those. the objections to the survey were based on preference. the boundaries are clearly marked and staked, they want the easements added, but they have yet to be established because it's raw land. i ask about the financing because the contract says cash and now they are switching to a lender wo an addendum filed. to me that's a breach of contract, they mis-lead us to get under contract. the title is clear, i own it outright and the commitment was sent to buyer from title. because it's cash i didn't even have to provide a survey. if i don't cure the objection on the survey (basically get a new survey at my expense) the contract could be voided, however i believe they already voided it by introducing a lender wo proper notification. The title company accepted the survey prior to this magical lender appearing. thanks for the responses!!!
A cash offer doesn't preclude the buyer from obtaining financing (at least not in CA or FL for contracts I'm familiar with), its just not contingent on financing. So your position when there was a lender objection could have been to simply hold them to perform on the contract as a cash closing. Their using a lender doesn't require an addendum unless there is some material change to the contract and closing, which wasn't the case until the objection and if they had simply closed with their cash as presented then it would never have been a change to the contract. So the breech isn't the financing it is the failure to close on the date agreed to.
I assume you received a fairly sizable EMD and obtained a POF for the full purchase price in their name?
correct, and that is the stance we are taking. the contract calls out the type of financing and they chose cash. there was an option for 3rd party addendum which they did not select. they are trying to change the contract by adding the lender to it via the objection. no contingency in place. thanks!!