What are my legal options ?

tonyzzztonyAugust 24, 2013

We accepted an offer on our house four weeks ago. Two days later buyer brought his own private inspector who came up with a list of things that according to him needed repair. To salvage the deal we offered to repair all the things in the list as long as the buyer still would buy the house. So they and us both signed an addendum which spelled out the things we're going to repair etc.
We spent $6K of our money to replace the roof, repair AC and some minor concrete work in the driveway. Everything was done by licensed and insured contractors and we forwarded the payed invoices( scope of work + how much we paid) to the buyers.

Last week FHA inspected the house ( buyers had a FHA loan pre-approval), they appraised the house more then the agreed selling price, they also indicated no problems with the house so we were looking to closing the deal sometime soon. Instead here is what happened.

1- Our agent told us the buyers agent had told her the buyers won't return her phone calls and she thinks they want to walk away from the deal.

2- Loan officer had told my agent the funds were no longer available. At the beginning my agent told me in writing the funds ( $5K down ) had been verified. Now the loan officer said they were going to get this money as a gift from their parents who now changed their mind. Buyers inclosed $1K check with the offer.

3-I received a letter from a law office today stating they represent the buyer. According to them buyer had received word that no firm commitment to obtain a mortgage will be forthcoming within 45 days ( as set forth in the Offer to Purchase) so I should feel free to pursue other offers

Im not happy to see these people just wasted a month of my time and $6K and now everybody is just kicking the can. I know going to the court is time and money consuming as well but if I have any legal options to recoup any of the money I spent I'd like to pursue them

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No, I don't think, based upon what you've posted here, you have any legal options to pursue them. You can force them to wait the full 45 days and require "proof" that they are unable to obtain a mortgage, but you cannot pursue them for the money you spent on repairs. Consider that your next buyer might have wanted those repairs also.

BTW--it's normal today that buyers ask for repairs and have an inspection. FHA won't approve a mortgage for a house that needs a new AC or new roof.

    Bookmark   August 24, 2013 at 5:44PM
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Do you get to keep the $1K?

    Bookmark   August 24, 2013 at 6:21PM
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Wow, I feel for you. I think it's pretty screwed up how there seems to be no protection for sellers. I hate hearing all these horror stories. I've had 2 such stories myself.

    Bookmark   August 24, 2013 at 9:21PM
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This is awful, but you need to shake it off and move along.
Hopefully your agent had you back active on MLS immediately, with the notation that there is a "new roof"!

Next time, add a deposit after the contract is accepted. $1K is fine for an earnest check, but is too low to keep a buyer committed. Maybe 5%, and more if they are asking you to be off the market for longer.

    Bookmark   August 25, 2013 at 10:46AM
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I agree, I wouldn't accept an offer without more money at risk for the buyer.

    Bookmark   August 25, 2013 at 12:16PM
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Keep your 1k earnest, and then, put it back on ASAP.

    Bookmark   August 25, 2013 at 8:30PM
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It isn't a good idea to get legal advice from a message board like this. Laws vary in different states (assuming you are in the US). You should consult an attorney in your state familiar with the law applicable to disputes such as this.

    Bookmark   August 25, 2013 at 8:34PM
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But you now know your house can/will appraise higher, so perhaps when you re-list you could make up some of the difference there.

*Granted there is no guarantee the next appraisal will come in the same.

    Bookmark   August 26, 2013 at 7:22AM
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The OP's title: "What are my legal options ?"

My answer: Only a lawyer can tell you that.
Contact one.

    Bookmark   August 26, 2013 at 8:27AM
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iWhy don't you increase you price by $6000 when you relist? With the new roof, it is worth more. Make sure the listing comments ays "new roof 2013" or similar.

    Bookmark   August 27, 2013 at 3:37PM
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It sucks but consider to alternative - the buyer could have screwed you over shortly before closing as unable to get final underwriting/job/income/closing cost confirmation would have killed the deal.
You still have part of summer to relist with new amenities and maybe even make more $$$.

Sorry to hear about your ordeal but as others have said demand more deposit.

    Bookmark   August 27, 2013 at 7:27PM
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Here in NC, if the buyer can not secure financing and they are still in the due diligence period, or the financing contingency, they can back out and receive the deposit back. If the due diligence period is over, then the seller can keep the buyer's deposit.
You need to read your contract and see how your state handles this situation. Chances are, you are due the $1000, but that would be it. It is not like they are backing out because of cold feet. They can not obtain financing. Your contract may even include a separate financing contingency which would protect the buyers through a certain period.
Before spending more money on an attorney, carefully read the contract; your answers are right in there.

    Bookmark   August 28, 2013 at 7:24AM
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