Expert: John - 12/3/2007

Question
We had a closing scheduled in September, 2007 for a "cash" buyer. The day before settlement, the buyers indicated their sales transcation (where the funds were coming from) was to be delayed about a week and would be agree to a "dry" closing. The week delay has turned into three months.

The buyers hired a new lawyer and attempted to get out of the deal based on a financing contingency -- even though there is none in the agreement and they are paying cash (I don't understand it either).  They also attempted to get out of the deal (after closing) by raising "disclosure" issues about assessments which were discussed the day after the dry closing in an association meeting.  In fact, the buyers went to that meeting and voted in behalf of the unit to approve the assessments (to be billed in March, 2008).  This was the day after the dry closing.

When we contacted their attorney, they admitted they just don't have the money to buy the property and are "grasping at straws" trying to delay/buy time.  They then called and said they would like to purchase the property with closing "in a week" with a $10,000 credit for assessments.  We agreed (not in writing) and have not heard anything from them.  Our attorney called and said they are "jerking us around" and to "relist immediately and sue for a short sale"

In the interim, we have relisted and sold the house for $60,000 less with a 45 day closing (scheduled for 1/15/08)(we are paying 2 home loans, one in another state where we moved and can't afford to leave the place vacant).

There is earnest money of $60,000 in escrow and total damages of around $20,000 more for interest and other expenses. Our attorneys says we have to "sue" them after the settlement to release escrow plus the difference based on the their breaking a contract but there are no guarantees we will win (even though they went to a dry closing and blatantly admit breaking the contract). This was all cash with no financing contingencies.

Any comments or help would be appreciated as we expect to sue the buyers after settlement next month. Thanks.

All of the realtors and lawyers we have spoke with said they have never seen anything like this bfore in 15 years.  That does little to take away that we have moved from NJ to PA, left our job, broom cleaned our house, make repairs they requested (one was a cosmetic bill for $2,100 they demanded to correct "sloping" in the floors).  We now have a deal for $60,000 less than the price they paid and have to take our chances suing for the difference and the escrow?  In the meantime, these people have done NOTHING but lie to us, jerk us around and make demands.  Also, assuming they even have a case, why have they not sued me to release their escrow?  Seems they are just sitting there waiting for me to sue them first (which I intend to do).

ANY thoughts would be appreciated.  Thanks.  

Answer
This sounds like a for sale by owner, and why you should always use a Realtor.

Really this all depends on how the contract is worded.  See an real estate attorney.

I asked my wife, who is a Realtor about this, and was told that as long as there is a open dispute, you can not touch the money.  Meaning you have to take them to court.

All there reasons are voided since it is a cash sale.  All signed papers / contracts are legal.

However, there statement ( verbal ) about not having the money, can not be used since anything verbal in real estate is void.

Unlike other Realtors you have asked, this is not the first time I have heard of this kind of problem with a buyer.

If you are asking me what I would do, I would keep the escrow ( go to court ) and just sell the house and forget about it.

However, you can not claim, "interest and other expenses".  You can not collect that 20,000 or any amount, you can only collect the escrow.

John