Posted on 04/24/2020 9:37:55 AM PDT by CaptainPhilFan
I am a real estate attorney and an investor in residential real estate properties. I can tell you from experience that he is not going to get a conventional mortgage if the property is owned by an LLC. That would be the case even if only your property were to be owned by the LLC. With multiple properties in the LLC, there isn’t a shot. There is a reason you are being jerked around. If I were in your shoes, I would move on.
No,Get a Lawyer and end this pain and put it back on the market.
Depends on the buyer. You can close a cash deal in 2-3 weeks. You can close less than 30 days with a financing deal where there is a 20% or more down payment and well qualified buyers(800+FICO) with reasonably liquid assets greater than the loan.
“Thank goodness you had a lawyer.
Oh, wait....”
I bought and sold approx. 25 houses. Had a lawyer look over every sales contract before signing. Best $350 dollars spent.
You need a different agent. Your agent is useless.
Your lawyer should have put a “time of the essence clause” into the contract, which is the only true way in New York to ensure closing by a specific date and to easily allow the seller to keep the defaulting seller’s deposit.
Still, your lawyer should immediately send a demand letter to the buyer’s attorney - certified mail, return receipt - establishing a firm date by which the closing must occur or that the deposit will be forfeited by the buyer as your liquidated damages. (It seems that the $2,000 deposit is rather low and is usually equal to ten percent of the purchase price so as to serve as a strong incentive to timely close.
Good luck.
As a former real estate agent, I’m suspect of your real estate agent’s motives. He has a fiduciary responsibility to you. If he is acting as a dual agent, it’s to both the buyer and seller. In Arizona, everything must be disclosed. The fact that you weren’t encouraged to take a back up offer makes me think something isn’t right.
I suspect that the market has gone very soft all over the nation as it’s hard to house hunt on lock down. We don’t use lawyers in AZ, so I’m not sure what their role in the transaction would be. I would point blank ask your agent and lawyer what his relationship is with the buyer. Document everything. Good luck!
Do every thing you can to make the deal happen, if it does not let them know you plan to keep the earnest money.
This is not a good time to sell a property.
It depends on the terms normally found in a Third Party Financing Addendum attachment to the contract. You mentioned it says Conventional Financing, so I would expect a paragraph that also spells out the terms of “Approval of Financing”. Read that paragraph carefully. It usually isn’t as simple as declaring that you are keeping the Earnest Money and moving on. I think usually the Escrow Agent has the Earnest Money, and can’t/won’t simply let you have it. Good Luck
Call the other buyer and see if he is still interested. Ask him what are his terms, if favorable, ditch the current contract.
Your lawyer should have put a “time of the essence clause” into the contract, which is the only true way in New York to ensure closing by a specific date and to easily allow the seller to keep the defaulting buyer’s deposit.
Still, your lawyer should immediately send a demand letter to the buyer’s attorney - certified mail, return receipt - establishing a firm date by which the closing must occur or that the deposit will be forfeited by the buyer as your liquidated damages. (It seems that the $2,000 deposit is rather low and is usually equal to ten percent of the purchase price so as to serve as a strong incentive to timely close.
Good luck.
See my post 6.
Seems like you and I are the only ones on this thread who knows that CV19 has done boogered up the Real Estate Market.
All these other blowhards stating “fire your agent”... “start over...” may have been good advice 2 months ago.
But now? That’s bad advice.
I would encourage you to talk to your lawyer and make sure that the prospective buyer is being dealt with professionally and with attention to details and contracts.
If the buyer has breached the terms of their purchase agreement, which it sounds like they have, then at this point you should be talking to your attorney to get the deal back on track.
You need advice from your attorney, not random people on the internet, but you might want to:
(1) Have you attorney and agent nicely notify the buyer that they are past their deadlines and have 5 or 10 days to cure their default and come up with funding, etc.
(2) Have your attorney and agent tell the buyer you are sorry that they are having problems, you understand the tough market, and you are going to re-list the property. You will give them the $2,000 back, minus your expenses (like legal fees) since you are a super nice person, and they can still come back to buy the property if they want to.
(3) See if the second buyer wants the house, and if so have your attorney tell the buyer and your probably former agent that the original deal is over. Whether or not you keep the $2,000, and whether or not you boot the agent is a tactical decision. Usually fighting over a couple of thousand dollars is not worth the effort.
Pretty much the same thing happened to me without the LLC adder. Stall, stall, stall, "we're getting closer", etc, etc, ad infinitum, ad nauseum.
We told'em to go to hell and took the next offer in line (which turned out to be better anyway). Pull the trigger!
Since he’s already past your contracted deadline, you can keep the earnest money.
—
Yup. Follow the contract. Use the contract to *your* advantage.
And if the time has expired/passed when the deal was to have closed, then it’s your option to walk away, especially if you are getting a bad vibe from the deal.
Fire your agent....Your agent is supposed to work for you...
~~~
That was my first reaction, but I have also heard that buyers and sellers agents often agree to split the commission.
Whatever you do, I would NOT agree to sign any contracts or extensions.
I would also open up communication (perhaps directly at first, if you can) with the other individual who made an offer. Let them know that your current sale/agreement may (but may not) fall through, and ask them if they are still interested.
I agree with the others.
Fire your agent.
Inform buyer that you be following the terms of the contract and keep the earnest money
Wow. FReepers are the best people in the world.
Thank you for confirming my angst and for the advice to hang in because this time is crazy.
The property is a 2 fam handy with a huge, double lot bordering 2 streets, in an upstate town in New York, that is quite desirable for a few reasons.
I spent 6 months cleaning, painting, and fixing after the long term tenant deserted the place and left $$$$ THOUSANDS $$$$ of dollars worth of damage and repairs. Losing money on this house left town 3 years ago.
(Rick the Tenant left town and disappeared somewhere in Nevada. He may be dead. Terrible hospitable bills were mailed to the house)
I will screw up the nerve to tell the lawyer to put an expiration date on this.
Thanks so much.
“All these other blowhards stating “fire your agent”... “start over...” may have been good advice 2 months ago.
But now? That’s bad advice.”
No it’s good advice see post #27. Houses are still selling in my area. The agent in question has failed his or her duties to the seller big time.
Seems like some people think they know much more than other Freepers when they actually don't.
Of course the real estate market is a mess. So is every other business. Try selling a car in places where the DMV isn't open to issue plates.
But even in the middle of a mess a buyer who doesn't have the money, and is unlikely to get it, isn't worth wasting time over.
Do you really think it is easy to set up financing now for what appears to be a real estate purchase for investment purposes?
Regardless of how bad the market is not upholding the terms of a sale contract is a very serious mistake. What do you think will happen if the existing buyer still doesn't have funding in 6 months, and the seller decides to sell the property to somebody else? The existing buyer still has a contract which has been effectively extended by a lack of any written default notices so the sale to the real buyer may not be possible to close.
In what could be a long term bear market for real estate finding a real buyer now could be a good idea. Getting stuck in a tangled up contract with a "buyer" with no money is a bad idea.
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