Dallas, TX · Member since 2013 · 67 posts · 0 votes
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?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
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.
Dallas, TX · Member since 2013 · 67 posts · 0 votes
12y
I'll add that the lender stated the only reason for their Credit denial was due to "excessive obligations". They never had an appraisal performed so they have no way of arguing that the house was over priced and if they thought the house was over priced then they never should have agreed to execute a sales contract and I'd assume that the judge will say that is poor due diligence on their part, no??. Bottom line is, they are in breach of contract.
Dallas, TX · Member since 2013 · 67 posts · 0 votes
12y
Originally posted by @Account Closed:
Take them to small claims court and let me know the day and time I want to be there.
Joe Gore
Joe, I'll be more than happy to pass along the court date and time. I'm not sure though, if the reason you want to witness my courtroom drama is to see if you are right with your assessment and disagree with my perspective, or just want to see me squirm and wallow as the judge fry's me as I'm overly confident in the case?? ;p
I was just trying to save you a set back. I know these judges extremely well, and all the buyer need is a letter from the lender saying loan was not approved, and you have about 10% chance of winning and take my advice and don't use a lot of hype the judges know the system extremely well.
Why didn't you mention until mid thread that the property hadn't been appraised yet? That changes the narrative that you were just a few days from closing and they went out and bought a new truck. I'm just saying.