I’m a seller and after four months of granting homebuyer’s contract extensions, I’m not going to grant another. I want my house back on the market. The current buyers have financing issues and apparently have made purchases and deposits on several things in the run-up to closing, and that has jeopardized their credit. I’ve signed off on previous extensions, but the last contract extension is now expired. Am I still at the mercy of the buyers? — Jill J.
No! You hold the cards here, not the buyer.
Many sellers in your situation who’ve magnanimously granted extension after extension are rewarded with nothing in the end, because buyers just can’t repair their credit in time. You’ve been more than patient, so unless there’s a stipulation giving the finance-challenged sellers even more grace time, your instinct to exit is right.
Some contracts may stipulate that the seller must give the buyers “notice to perform” within a set period, even after a previous contract extension. But if you’ve not been asked to sign off on another one or on an amended escrow agreement, you’re probably in the clear.
Buyer has stalled your plans
There’s a bigger risk of getting sued if you announce you are keeping the deposit, especially if it’s a significant sum, even if you believe you have a contractual right to do so. Yes, you have been inconvenienced, but do you want to risk going to court?
Don’t feel badly about moving on, because your sympathies for the buyers already have been tested repeatedly, no doubt keeping you from moving on with your own life plans.
While it may be that the buyers didn’t realize that making a bunch of credit purchases before closing (always inadvisable), would count against them with the lender, that’s their “bad.” Someone, be it their lender or agent, should have informed the buyers of this no-no, although that warning isn’t required by law.
Time to see a lawyer?
One way to determine whether the buyer’s contract is now kaput is to see a lawyer. Even then, there’s no sure way to know if the buyers will sue should they have any grounds. But if I were to guess, buyers wanting to sue would be informed by their counsel that they’ve already broken the contract, which, by the way, is also expired.
Other options for you include sticking with the sellers but asking them for a larger deposit with stricter deposit forfeiture language or at least demanding a per diem for every day the closing is delayed.
However, in the big scheme, agreeing to wait once more for these delinquent buyers seems like an exercise in self-punishment. It’s time to unbind your house so serious buyers can have a go at it. Next time, don’t accept an offer from a buyer without a preapproval letter. That’s still no guarantee that something won’t come up in the final underwriting stage, but it sure improves the odds of a timely closing.