Sellers furious after buyers cancel deal, pocket deposit
DEAR BOB: We put our home up for sale in early October.Within a week, we signed a sales contract with buyers. Eight days later, thebuyers backed out, stating they changed their minds. We opted to keep their$2,500 earnest money deposit. But we discovered the next day the real estateagent never received the $2,500 stated in the contract. We believe we are owedthis money but have been advised to “forget it.” Who is at fault fornot actually collecting the $2,500 and should we try to collect it? –Joy C.
DEAR JOY: Shame on that real estate agent. Unless the realestate agent told you the $2,500 earnest money deposit stated in the salescontract had not been received from the buyers and deposited in the agent’strust account, that agent is clearly liable to you for the missing $2,500.
Purchase Bob Bruss reports online.
If she refuses to pay you the $2,500 promptly, take her tolocal Small Claims Court to obtain a judgment against her. There is no validexcuse for a real estate agent ever bringing you a purchase offer to accept andnot informing you she hasn’t received the $2,500 earnest money deposit statedin the contract.
Real estate purchase contracts do not include a “freelook” allowing the buyer to back out eight days after the seller acceptedthe offer.
Of course, if there was a valid contingency clause, such asfor the buyer to obtain a mortgage, that would be a legitimate reason to cancelif the buyer was rejected for a mortgage by several lenders. However, if thebuyer never applied, then that escape clause can’t be used. For details, pleaseconsult a local real estate attorney.
REALTOR AGREES BUYING FROM FORECLOSING LENDER IS WISE
DEAR BOB: I love reading your articles, especially when Iagree with you. Recently you said you prefer not to bid at foreclosure auctionsbut instead contact the foreclosing lender immediately after the auction ifthere were no bidders. I’ve been a Realtor about 15 years and this is exactlywhat I did when I purchased my home. By contacting the lender after theauction, I was able to get the lender to pay for a new furnace that neededreplacing, erect a fence that was necessary around a pool, and I still paid about$6,000 less than if I had bid at the auction –Donald M.
DEAR DONALD: I always appreciate feedback on my articles,especially when we agree. Buying REO (real estate owned) from the foreclosinglender is the best way, in my opinion, to acquire foreclosure property. Manyforeclosing lenders also offer very attractive mortgage financing to buyers oftheir REO properties.
LATE-PAYING BORROWER MIGHT BE GETTING READY TO FILEBANKRUPTCY
DEAR BOB: We hold a mortgage note on a property we soldabout 10 years ago. The final payment is due in a week. A few days ago, theborrower called to say he might be late with the final payment. He said hismortgage broker was moving very slowly, and he even went to someone else to getrefinanced. Last January, the title company asked us to fill out the paperworkfor full payoff of this mortgage. In August, they requested an updated payoffdemand. What are my options? I think the borrower might be trying to combine acouple of mortgages on several properties he owns. I just want to be sure hedoesn’t take advantage of us –Linda L.
DEAR LINDA: Since you are dealing with a reputable titlecompany, you probably have nothing to worry about. However, if the due datepasses and the borrower shows no sign of paying the balance soon — aftergiving him an extra 30 days or so — I would suggest beginning the foreclosureprocess.
Most institutional lenders now give only 30 to 45 days’grace period. Once you begin foreclosure, the borrower must pay your expenses,such as attorney fee, filing costs, etc.
I am concerned the borrower might file bankruptcy, thusdelaying the time you will get your money. As a secured mortgage lender you arewell protected, but starting foreclosure soon shows the borrower you meanbusiness. For details, please consult a local real estate attorney specializingin foreclosures.
The new Robert Bruss special report, “How to BuyFixer-Upper Houses with Little or No Cash for Fun and Fortune,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this columnare welcome at either address.
(For more information on Bob Bruss publications, visit his Real Estate Center).
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Copyright 2006 Inman News
