We have been in contract for 2 months.Buyers signed contracts. We are ready to close.We have taken care of all minor repairs that were mentioned in contract and have done some additional things as a good faith gesture.Buyers had a mortgage commitment contingency in contract.A Rider stated that they had 30 days to get their mortgage or they had to give written notice.It also said they would be allowed to cancel the transaction without penalty if they gave notice within the 30 days.Sellers were also given that option.We were told by buyer's agent that they would put a lot down and be ready to close in 30 days. She promised that they were not a risk with their mortgage. The Purchase offer was much lower than we wanted--definitely low ball but we accepted because of the terms promised.The closing date was set for on or about the 18th of Nov. As weeks went on during the 30 day contingency period we were not getting any input as to their status. We called our lawyers and they called their lawyer.Our lawyer was told that they didn't get a mortgage they could handle.Their bank changed the terms.No written notice sent to us! We had to call.They did not have their Green Cards! Bank found out.From Nov. 18th through now we have gotten so many mixed versions as to why they don't have a mortgage as of yet. We were also told that they are shopping around now bank to bank! They are holding our home hostage. We sent a Time Being of the Essence Letter for Dec 18th but they said they needed more time.They also said they really wanted our home and would get someone to go in on the mortgage who had a Green Card. We agreed to another month on Dec. 5th We extended The Time Being of the Essence to first week in January!..Their lawyer and agent are upset with us. They are demanding another Mortgage Commitment Contingency clause! We are beginning to smell a rat. We think that if we grant them another contingency they will cancel the deal and we will not have a claim to the deposit. We really just want to sell our home and are trying to accommodate the buyers without jeopardizing any compensation claim if they default. They are threatening to challenge us for the deposit. We don't see on what grounds. We have been more than accommodating. We would have canceled within the contingency period if we knew that they had problems obtaining their mortgage. By not giving notice they have not allowed us that option. Meanwhile we are paying out more money in mortgage, taxes, insurance fuel etc than was planned. ( Not to mention the stress that is occurring within our family. We are paying two mortgages!)Shouldn't their agent have been responsible to know if they had Green Cards before they sent in a Purchase Offer?? Shouldn't our agent also have questioned this? Isn't there a question about this on the mortgage application? If buyers weren't forthcoming isn't that fraud and very illegal? We are pretty sure they are trying to cancel and don't have an out at this point without being penalized. We feel we have been duped. Any suggestions, or thought would greatly be appreciated. We are going to ride out the contract and see what happens as we really want to sell.
Answer by lolly
Wow what a nightmare. From the sounds of it they don't have the right to be trying to call any of the shots at this point, either they pay up and they get the house, or they opt out and you keep their deposit.
Do they not understand how it works? You are in the right, so don't stress about that. All I can suggest is that you contact a lawyer to find out what you can do.
Answer by I Buy And Sell Houses
First: Where's your Realtor in all this? You refer to communications to you from the buyer's agent. No. Buyer's agent should be communicating with your agent. And your agent should be on top of the issue. For example, he/she should have been in regular contact with the buyer's agent to check on the status of the financing.
Second, the basic scenario you describe is not unusual in today's market. Someone wants to buy a house. But during the financing process, the terms change and they're no longer able to afford to buy. So they keep looking for financing and, meanwhile, seek an extension on the contingency. Again, your Realtor should be explaining this to you.
Third, you say they're demanding another mortgage contingency clause. And you say they're holding your house hostage. No. You've got the control here. You don't have to grant another contingency clause. And when the existing contingency expires, that's the end. No hostage situation. They can ask for another mortgage contingency clause, but they have no power to demand. And you're under no obligation to grant it. Again, ask your Realtor.
If the borrowers lied on their mortgage application (it's not clear if they did or not; you don't know for sure), then the lender has the right to deny them a loan, which is apparently what happened...or at least a loan under acceptable terms and conditions. I'm not a lawyer, so this isn't legal advice. However, it'd appear that it was at worst attempted fraud involving the borrower and lender. "Very illegal?" Probably not. Your lawyer can answer that one.
Consider cancelling the transaction, within the parameters of the contract. Keep their deposit. Put the house back on the market. (Technically, in many areas, your house is still on the market. Your agent should still be marketing it. It still should be on the MLS, just showing "Contingent" rather than "Active.")
It really sounds to me as if you're trying to save a deal that died a long time ago. If you're serious about selling, then don't fiddle around with unqualified buyers. End this transaction (per the terms of the contract) and move on.
Answer by Shanx
There are some great answers already. You have the control. I feel you are worried that if you let these guys go, then you won't get new buyers. You have to make a choice. These buyers clearly are having issues, and if you are not getting comfort, then break the deal before it is even more late. And important information (eg. Green Cards not there) was mis-communicated. You have to tackle the situation...get everybody in a room, and tell them exactly as you told us here. And tell that you are going to close the deal because you need to find a new buyer.
Know better? Leave your own answer in the comments!
Orignal From: How could this have happened.?
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