Broke Seller Wants Out
Anyone have experience with a seller trying to get out of a sale at the tail end? We’re trying to schedule closing and the seller is trying to get out of it. They actually don’t have enough money to close, because they are in more of a financial pickle than we had any idea of….
Anyone have experience with a seller trying to get out of a sale at the tail end?
We’re trying to schedule closing and the seller is trying to get out of it. They actually don’t have enough money to close, because they are in more of a financial pickle than we had any idea of. (We had no idea there was any pickle.) They owe the bank approximately what we’re in contract for, which leaves nothing for transfer taxes and their real estate agent.
We’re loathe to walk away since that would mean eating what we’ve spent on lawyers and mortgage applications, not to mention lost time going back with inspectors and whatnot.
Any ideas? Our lawyer is great, but he’s basically saying that we can try to force them to perform per the contract but it will drag out, because they don’t have the money.
If I understand the story, if they reduced the price then they would owe the bank more than they could afford to pay them at closing. Either way, it sounds like they need to bring the bank in on the negotiation.
If I’m reading this correctly, why not try to have the price reduced by a corresponding amount to the closing costs owed, and you could then pay the costs yourself? (Provided, of course, that you have enough cash).
Or, even have a bigger reduction in price to account for your inconvenience and requirement that you produce perhaps more cash than you thought you’d need at closing. And maybe their realtor could take a smaller cut.
I have no small amount of sympathy for your sellers, but you appear to hold the legal cards here.
If the seller can’t afford to pay the closing fees and taxes, how’s he going to afford next month’s mortgage?
IANAL, so take it FWIW, but how about both of you going to his mortgage company and negotiating something called a “deed in lieu of foreclosure”? Basically, this would quit-claim the house back to the bank and it would sell it to you. They might even work out something where you could take over the existing mortgage. If the seller is that far out on the edge financially, and can prove it, the bank may want to cut its losses early.
Also, Thanks.
They do have a lawyer, but exlege/4:42 has a point.
If they could reimburse what we’ve spent on lawyers and mortgage applications, we could maybe wrap our heads around eating the time we’ve put into this and walking away, but they can’t reimburse us for anything.
There is no way they are going to get a better price before the bank forecloses on them, and they’re not going to be magically better off in that event.
So far no one has said anything we don’t already know (We should sue them. We need a good lawyer. Lawsuits aren’t simple. We shouldn’t trust legal advice from anonymous internet forums. Suing them might not be worth the trouble. The What is nuts.) but that alone is kind of reassuring and helpful. So far, nothing is inconsistent with what our lawyer is already telling us.
From the sounds of this situation, I will go out on a limb and guess that the seller was not represented. If they did have a lawyer, some serious questions should be asked of him/her as to why the transaction was allowed to go this far.
Sorry, reread the post. I got it backward, repeatedly. I thought the buyer was backing out.
My bad. My posts on this are meaningless.
the seller loses time but many contracts provide that the title expenses are reimbursable by seller if they are unable to convey (usually only for a failure to clear title).
Holding the seller to the letter of the contract is fine if you insist on going the distance with litigation. Unless this sale is at a significantly below-market price, the purchaser might be better off going elsewhere. A lis pendens will prevent other buyers, but the resolution of the case could take significant time. Sometimes you are better off moving on. sometimes not. It is a tough call.
Damn What . . . you are on some serious drugs.
I am not even sure I can wrap my head around this. Am I correct in thinking that your suggestion is for the seller to go out and try to get a second mortgage (as if that’s going to happen in this credit market) when the sale price of their home is obviously not enough to pay off the lien they have now?
Payoff letter? are you just thinking of phrases and writing them? Are you saying that you want to verify the amount of the debt to make sure the seller is not pulling the purchaser’s chain?
Maybe the problem is not that you are on drugs, maybe you are OFF drugs. maybe you should look into it.