Updated over 7 years ago on . Most recent reply
Buyers financing fell through. Do I have any recourse?
Here's the scenario. After agreeing on sale price and having their inspection, the buyers and I agreed in a repair amendment that I would make certain repairs to my property which ended up costing me approx $4,500. Now, we are out of the option period and with just days left until closing they went out and bought a new car! Needless to say they can no longer get financing for the house. They are in breach of contract and I will get their earnest money but I'd really like to know if I have any legal recourse to take regarding all the repairs I had made as we had agreed to in the contract?
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
Yes, that's a breech of the contract. Next question is what are you remedies. Your contract will spell that out. Usually its "liquidated damaged". That means you keep the EM and that's it. If it says "specific performance" then you can push them to buy the house. Which they're not going to do - they can't. Does your contract say liquidated damages or specific performance?
Assuming its liquidated damages, and the deadline for their financing contingency deadline has passed, then you can keep the EM. If the financing contingency deadline has not passed, you won't get to keep the EM.
Put it back on the market and find a new buyer. Hopefully the repairs were things that will have value to the next buyer.