House Selling Angst

[Caroline T.]

Re: House Selling Angst

Toni, I'm so sorry the deal fell thru, I know how frustrating that can be. But on the up side, thankfully it didn't happen the day of closing! That's how I ended up buying my current home: multiple offers were made, the sellers chose a different buyer instead of me, and literally at the closing table the buyers started making demands that weren't in the contract, and the deal fell thru. We were contacted to see if we were still interested, and we jumped at it! Since we were pre-qualified and we were even able to reimburse the original buyers for the appraisal and inspection that they had gotten done, so there was no delay in waiting for those, as a result we were able to close in 3 weeks.

Now may I be the fly in the ointment? I'm surprised that if the buyers made a full price offer why there would have been additional negotiations back and forth. Maybe there were some contingencies that they wanted, or you wanted that they didn't, that made them change their mind? You don't need to answer that question, it's really none of my business, just something for you to consider (or ask your Realtor).

But either way, if the FINAL agreement hadn't been SIGNED off by both parties, sadly then the contract was not binding and they would be entitled to a return of their earnest money.

I hope the next buyer will be the perfect buyer for you and you have a successful sale.

[Grey Lady]

Re: House Selling Angst

We sold our home in NJ two years ago. In NJ, as we and several friends discovered, hand money (earnest money) always gets returned and contracts are broken half the time. The reasons don't really matter. As sellers, you're on pins and needles until you close. But you will sell, and go onto a great new chapter.

[Squeaky]

Re: House Selling Angst

When I sold a house there was an option fee (very small, like $50-150) and then there was earnest money after the option and contract, which is more like 1% of the selling price. The option fee is always non-refundable, and one buyer backed out and had no reason so I got $75 for my time but they hadn't yet put down earnest money and even if they had I would not have been able to keep it.

As far as funding I've heard of people being pre-qualified for an amount based on preliminary bank review of credit rating, income, etc., finding a house they love at the top end of that, and then when the final mortgage process gets going in advance of closing things are found that reduce the amount that the lender will actually give. If this is even just a few thousand less than the original or if the closing costs can't be met by the buyer, the funding will fall through. It could even be the lender/mortgage company not being satisfied with "where did the down payment come from" evidence and deciding they will no longer back the loan.

[GuitarGramma]

Re: House Selling Angst

Now may I be the fly in the ointment? I'm surprised that if the buyers made a full price offer why there would have been additional negotiations back and forth. Maybe there were some contingencies that they wanted, or you wanted that they didn't, that made them change their mind? You don't need to answer that question, it's really none of my business, just something for you to consider (or ask your Realtor).

But either way, if the FINAL agreement hadn't been SIGNED off by both parties, sadly then the contract was not binding and they would be entitled to a return of their earnest money.

Amazing story about how you got your house! And you are welcome to be a fly in my ointment anytime you wish, my friend.

The negotiations pertained to us getting out of the house in the timeframe they wanted. They had to close escrow before the end of the year, and we knew we couldn't pack up and get out in that short a time. Eventually they offered to rent the house back to us for two weeks after escrow closed. It's the reason I'm so confused; they have to close escrow THIS MONTH! And they are the ones who made the suggestion to rent to us. I thought it was a WIN WIN since their stuff is already in storage (out of state).

You bring up an interesting phrase "if the FINAL agreement hadn't been SIGNED." I suppose it's not final until money changes hands, but the final offer had been signed by everyone involved.

I don't think I'll ever understand what happened.

[GuitarGramma]

Re: House Selling Angst

When I sold a house there was an option fee (very small, like $50-150) and then there was earnest money after the option and contract, which is more like 1% of the selling price. The option fee is always non-refundable, and one buyer backed out and had no reason so I got $75 for my time but they hadn't yet put down earnest money and even if they had I would not have been able to keep it.

As far as funding I've heard of people being pre-qualified for an amount based on preliminary bank review of credit rating, income, etc., finding a house they love at the top end of that, and then when the final mortgage process gets going in advance of closing things are found that reduce the amount that the lender will actually give. If this is even just a few thousand less than the original or if the closing costs can't be met by the buyer, the funding will fall through. It could even be the lender/mortgage company not being satisfied with "where did the down payment come from" evidence and deciding they will no longer back the loan.

I like that "option fee" idea. I'm going to see if that can be done in California.

I don't think the buyers' funding fell apart, as this all happened over the holiday weekend,and they cancelled on Monday. There just wasn't enough time for a funder to even look at their application.

[GuitarGramma]

Re: House Selling Angst

We sold our home in NJ two years ago. In NJ, as we and several friends discovered, hand money (earnest money) always gets returned and contracts are broken half the time. The reasons don't really matter. As sellers, you're on pins and needles until you close. But you will sell, and go onto a great new chapter.

Thank you, Grey Lady. I guess we're in good company.

[GuitarGramma]

Re: House Selling Angst

That giving the earnest money back sounded so fishy to me too. Now that the shock of the situation has settled in hopefully you and your family will enjoy one last Christmas there. Your house WILL sell and your kids will forgive you for moving. We sold our family home too, my daughters weren't very happy about it but now, 10 yrs later, they are all older, wiser-- they can see it was right for us. We planned on downsizing but wound up buying a house about 800 sq ft larger than the one we sold, but now I have my own sewing room!

How fun to have your own sewing room! We definitely downsized, as we have already bought our new home. It's 2,000 square feet smaller and a bit of a fixer upper, but the fixing up has to wait until the other house sells. So no Christmas in my old house, as we're already 500 miles away and won't return until we have to pack.

However, we chose this fixer wisely: There's room to build on a sewing room, and my hubby is 100% behind the idea!

To EVERYONE: Thank you for your assurances that our house will sell. Negative-Nelly me, of course, can't see that right now, so I need all of you to remind me of it! And right now, I'm off to buy a new dishwasher because I can't live with the rust in the old one. I'll feel better then; shopping always cheers me up!

[DeniseSm]

Re: House Selling Angst

Here is something to think about. I assume you are paying the standard 6% commission to the real estate agent, half of which will go to her and half of which will go the buyers agent. Your real estate agent is supposed to be fighting tooth and nail to defend you. Do you think she did that in getting your earnest money back? If not, why in heck are you paying a 6% commission?????

[MSN]

Re: House Selling Angst

If there had been an inspection, the buyers could have found something -- anything -- which they could use to back out of the sale. But having second thoughts about climbing stairs with arthritic joints seems like these buyers may be a brick or two short of a full pallet. As you said, it's not exactly a hidden defect. I wish these poor folks good luck finding their dream home and closing on it by the end of the year!

[GuitarGramma]

Re: House Selling Angst

@Denise: Yes, my mind has certainly wandered down that path!

@MSN: Exactly my thoughts today when the pressure was gone from our realtor to sign the OK-we-understand, get-out-of-jail-free paperwork. I pored over the paragraph they used to back out, and it's only about defects, not about a change of heart.

Here's my promise to you all: by the morning, I'll have put this aside and will pretend this heartbreak never happened. I've done my best staging the house, we've moved out so that everything stays gorgeous, and I'm just going to wait for the real buyer to come see the home.

BUT IN THE MEANTIME, thank you all for your sweet support. It's been huge for me.

[grammaterry]

Re: House Selling Angst

having been a realtor for 20 years 20 years ago (almost) , I was surprised when we were looking at property at the coast and signed a contract. The realtor spent a lot of time telling us that the new contracts were written so that you could back out at any time during the due diligence phase for any reason...Earnest money returned. We did back out after the inspection and I know that the Realtor and the sellers were probably devastated. On the contract there was another space for a non-refundable fee. If I were a realtor here, I would demand a minimum of $5000 non refundable for anything that was not related to the disclosed items on the house. I truly felt that the seller should have had some compensation for the stress and removing the house from the market for several weeks. However, as a buyer, it sure takes the stress of making an offer off the table.
So, my thoughts...next offer...even if you have to add an addendum...get a non-refundable deposit of several thousand for anything that is a personal choice. for instance...if they have a letter of credit stating they can borrow the money (no return) if the house meets the inspection based on what you have disclosed (no return) Not your (the sellers) fault, (no return) but, if the buyer finds there are things about the house you didn't tell them (termites), structural damage, flood zone, roof damage, electrical problems then you give them the money back.

[GuitarGramma]

Re: House Selling Angst

Terry, this is excellent advice. I plan on discussing this kind of thing with my realtor.

Sadly, no one has even come to see the house since the deal fell through. sigh.