Seller of home in preforeclosure wants to back out of contract

[Sade Williams]

Good Afternoon Bigger Pockets, Sade' here from South Florida. 

I am a new agent working with a buyer who is currently selling her current home to an investor because it is in preforeclosure. After looking for homes, she decided to wait until she closes before looking for her new home in which she would be buying cash with the funds from her current home. She was supposed to close on the property today however the investor contacted her on Friday letting her know they cant get in contact with the HOA, therefore the have not started the approval process. She then contacts the investor and tells them she wants to cancel and is no longer interested in selling her house. So my first thought is well if you dont sell now it will only be a bigger nightmare, we need to get the ball rolling since we have already lost alot of time, we need to get the application into the HOA ASAP while we extend the closing date. Come to find out after pulling teeth, she went ahead and mailed in the late payments on her morgage on monday, this is why she wants to back out of the contract. She is coming it to me because she was not represented by an agent when selling her house and is now in a bind. I have consulted with my broker on her options but has anyone ever been in the situation?

This is my first client too. 

[Wayne Brooks]

@James C., the agent here has no legal dog in this hunt, she wasn't part of the transaction.  @Sade Williams, for your own education, any specific performance the "investor" may have would be dependent on the language contract executed.  That right is contained in the FARBAR contracts. It might be helpful to know if the buyer was a real buyer, or just a wholesaler.  Typically, the outcome on a specific performance action is more dependent on the judge, if it really goes that far, more so than the letter of the law. Depending on the language of the contract, the buyer's lack of ability to reach the hoa (which is pretty lame) likely doesn't extend their timeline to secure financing and close, thereby letting the seller off the hook since the buyer can't perform.

As mentioned before, some clients are just a waste of time, some you should help just because it's right, and may lead to some pay off down the line.