Expert: Lori Frankfort - 7/5/2009

Question
QUESTION: I offered to buy a home from a mutual friend, contingent on the close of escrow of mine.  After three months, my buyer was not able to get his loan approved.  Meantime, the seller of the home I was trying to buy gave up his renter and had repairs done to the home.  Am I liable for lost rent or repair costs since the sale of my home did not close?  BTW, the seller's agent of the home I was trying to buy never had us sign a purchase contract, everything was done thru email.  Thanks -

ANSWER: The very short answer is No. All real estate contracts must be in writing with a signature. If it was me, I would offer some money to keep the friendship. Best, Lori

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QUESTION: Regarding the other end of my transaction, the buyer for my house who can not get his loan approved after I signed three extensions, is not signing the cancellation of escrow.  My agent has put my house back on the market, pending cancellation of escrow, but no agent wants to show the house under these circumstances.  My agent says the buyer is just "out of town."  But he's been out of town for 3 weeks now!  What are my options?  Thanks so much!

ANSWER: I'm assuming they had not released their loan contingency, therefore no liquidated damages?  If that is the case, threaten to sue them for damages. You can tell them you have lost buyers as a result of not cancelling. This should encourage them to act.

---------- FOLLOW-UP ----------

QUESTION: All contingencies were removed over a month ago.  Both agents and title co kept saying everything was fine, the lender was just backlogged. At the last minute, a lien showed up on his credit report and he says he can't pay it. Does it benefit him in any way to not sign the cancellation?  He only put down $500 in earnest money which my agent told his I would give back.  Just want to move on... thanks.

Answer
Why was there only 500 in escrow? It should have been 3%, and you would be keeping a portion of that for your costs and damages. Tell the other agent you're not only going to keep that 500 but you will be suing for more. That makes me very mad. They have all wasted your time now, including your agent.   Give them a deadline for signing the cancellation.