I live in OHIO I have a tough situation. I was in contract to sell my home to a buyer (#1).
During the contract period I was offered (from a previous potential buyer #2) much more to purchase my home. Obviously I was already in contract and was going to honor that. However, the buyer (#1, with whom I was in contract) failed to provide proof of financing during the financing period. Their agent was new and had never completed a deal before. In fact, they only had a 15 day period from contract start to provide proof of funds. Since they missed the clearly outlined period, my agent sent them notice that they had missed that deadline and that the contract was now invalid. The buyers agent was scrambling and realized (after we told them) that the milestone had been missed.
In any case, my agent then sent the buyer (#1) a mutual release agreement which (from my understanding) basically says that no one has any obligations to anyone. Now, of course, the buyer (#1) is refusing to sign it. At this point, my agent tells me that we can't continue with the second buyer (#2) since we don't have a signed Mutual Release agreement. The 'backup' buyer (#2) still has interest and knows that we are waiting for the first buyer (#1) to sign the agreement.
I can't imagine that I have to wait around for the #1 buyer to sign the agreement. I'm wondering if I can just continue with buyer #2 EVEN if I don't get the signed Mutual Release agreement from buyer #1.
Has anyone been in this position before and have any suggestions? I AM going to be taking this up with an attorney, but since it's the weekend, I'd just like to have a take on this by someone that's been through this before.
The people under contract didnt execute as per the signed contract so if they broke it you should be able to then do business with your back up buyers and not be locked into anything.
Tell your agent to proceed with back up buyers and not worry about the ones who are not cooperating.
Thanks @Curt Davis , that was my take as well. My agent is reluctant to continue with the backup buyer but we'll see what happens.
Have you been in a similar situation as well?
Yes, agree with Curt. Buyers who have defaulted will try to use the release agreement as leverage. Don't know the exact wording of your contract, but if you're sure they're in default, notify them of such, agrre to release their deposit, many move on. Don't let any threats deter you.
if what your saying is how it transpired then the buyer is out of contract and the contract is done... just act like it never happened... and since the buyer won't sign I am assuming they never put EM up... So just move on.
the only issue you may have is you would have to move to a different closing attorney or title company whatever you use there... but that would be it.
Talk to your agents principal broker.. your agent should know this
Thanks all. I consulted with an attorney as well and he confirmed as long as the contract does not specifically mention a requirement for mutual release then none is required. My agent has said all along that we need to have it signed but not being an attorney, I think she was ultimately attempting to protect herself from liability.
All that said, the buyer ended up signing it today anyway. It just means that none of us no longer have any contractual obligation to one another. That said, it would have been interesting had he not signed it -- academically.
Thanks again all!
Join the Largest Real Estate Investing Community
Basic membership is free, forever.