Signed contract - Asking for extension. Again.

caulk_kingDecember 6, 2009

Hi -

I have a small commercial property that has been on the market for some time. We have a signed contract, earnest money posted, title work done (at my expense)& we are almost at the end of the option period for the seller to back out without losing the earnest money. About 2 weeks ago, the seller contacted our realtor asking if they could get an extension. We declined & they said they'd make all deadlines & close this month.

Well - our realtor contacted us & said he expects them to request an extension of 60-90 days. The catch is there are 3 other interested parties that won't even look at it while it's under contract.

We said to try to show it & if they make a firm "back-up" offer, we'd seriously consider it next week when we have to decide whether or not to grant an extension.

If we go with the 1st buyer, can & should we require more in earnest money for essentially having it off the market for so long?

What would you do?

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susanjn

This is confusing. Are you the buyer or seller?

    Bookmark   December 6, 2009 at 8:28PM
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caulk_king

Sorry. I'm the seller. We have a signed contract with a buyer that will be asking for an extension.

Should have been:
About 2 weeks ago, the *BUYER* contacted our realtor asking if they could get an extension. We declined & they said they'd make all deadlines & close this month.

    Bookmark   December 6, 2009 at 10:44PM
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Billl

I guess it depends on how the commercial property market is in your area. At my company, we are trying to sell a warehouse and have encountered similar problems. The credit market for commercial property is still pretty sketchy and there is a lot of inventory to compete against. We've ended up agreeing to an extension.

    Bookmark   December 7, 2009 at 10:26AM
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dreamgarden

"Well - our realtor contacted us & said he expects them to request an extension of 60-90 days. The catch is there are 3 other interested parties that won't even look at it while it's under contract."

You have 3 other interested buyers? What are you waiting for?!

If it were me (and I had other potential buyers), I'd say no to another extension, tell them to stop wasting your time and put up or shut up (lose their earnest money).

Here are three more reasons why you might want to act sooner than later.

Links that might be useful:

Wilbur Ross Sees âÂÂHugeâ Commercial Real Estate Crash (Update2)
October 30, 2009
www.bloomberg.com/apps/news?pid=20601087&sid=amPXzjQV3nGQ

Commercial real estate nowhere near a recovery as bottom is year away at least-Poor property prospects
By Steve Kerch, MarketWatch
Nov. 5, 2009
www.marketwatch.com/story/commercial-real-estate-
yet-to-hit-bottom-2009-11-05?siteid=rss

Commercial real estate woes imperil US recovery
Nov 15, 2009
news.malaysia.msn.com/top-stories/article.aspx?cp-documentid=3705662

    Bookmark   December 7, 2009 at 12:54PM
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caulk_king

I have no way of knowing if the 3 other people are really serious or not - they won't even look at the property while it's under contract & I can't say I blame them. Why waste time...

The realtor is showing it to one of them on Thursday. If they make a written offer, I guess we'll have to decide. If they don't, then we'll just have to decide about the extension. I know the commercial market is bad - it's been on the market for a very long time. We've gone thru a series of price reductions & finally hit "the price" apparently!

    Bookmark   December 7, 2009 at 7:36PM
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kelpmermaid

What reason is the buyer giving for needing the extension? Is it specific to him/her? Is it a financing issue that anyone else is also likely to face as well? I'm sure that things are likely to slow down through the holidays...

    Bookmark   December 8, 2009 at 10:47PM
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sweet_tea

Here is a thought: have them pay $x for the extension.

For example, $5k payment NOW to you for a 60 day extension and $8k NOW to you for 90 day extension. You keep the money no matter what. You don't sign the extension without the money in front of you.

    Bookmark   December 9, 2009 at 10:07AM
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caulk_king

The reason appears to be "personal" in nature, not financial. I do not have the specifics. I am pretty certain (as certain as I can be without seeing bank records) that the money is there.

I like the idea of paying $$ for the extension. I will kick that around with our realtor when I talk to him after Thursday's showing to one of the other interested parties. Maybe they'll come in with a higher cash offer & want to close on Friday. OK - maybe not on Friday......

    Bookmark   December 9, 2009 at 10:42AM
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caulk_king

We asked for more money to extend & they declined, thus ending the contract. They say they are still interested, but will wait to see if they are able to straighten out whatever it is they need to straighten out. So - back on the market! Hopefully the other interested parties are still interested!

    Bookmark   December 14, 2009 at 12:36PM
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ncrealestateguy

You did what you needed to do... you forced them to show their hand.
Good luck.

    Bookmark   December 15, 2009 at 7:35AM
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caulk_king

Thank you. I've since heard thru the grapevine that it may be divorce.... so we'll see if this resurfaces once things are settled/final.

    Bookmark   December 15, 2009 at 6:10PM
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