AboutJohn Souerbry Expertise I'm a broker/consultant specializing in real estate investment. Whether you're currently an experienced investor or just getting into the business, I can help with investment strategies, business planning, deal analysis, negotiating, financing, and property management issues. Regardless of whether the property is residential, commercial or bare land, large or small, I help you increase profitability through sound decision making and effective business management. I also work as part of your estate planning to team (estate attorney and tax pro) when you are planning to leave real estate to your heirs or when you are receiving real estate as part of an estate disposition.
Experience I have experience in buying/selling residential and commercial real estate, property management, financing, and assistance with estate planning and disposition.
Organizations National Association of Realtors; California Association of Realtors; Silicon Valley Association of Realtors
Education/Credentials BS, Business Administration
MBA, Global Management
Past/Present Clients I have worked with individuals holding one or two properties and with clients and estates holding over 40 properties of many different types (apartments, condos, single family homes, land).
Question QUESTION: Hi. If my buyer's loan funding is not available on closing date, am I obligated to give him an extension? Or can I go ahead and cancel the purchasing contract?
ANSWER: Diane,
Your question has a lot of moving parts, but if you are looking for a way to get out of the contract because you no longer want to sell, you may be able to get out of it.
The moving parts that might keep you from being able to get out of the contract involve contingency removal periods and the language used to describe the closing date.
If the loan contingency date has passed, or if the buyer has cleared or waived the loan contingency, they are obligated to close by the date specified in the purchase agreement.
If the closing date is stated as a firm date or maximum number of days after acceptance by both parties, then the buyer fails to close on time, they have defaulted on the contract. You agent or attorney should be able to advise you when and if you are able to pull out because the buyer has defaulted.
But you can usually pull out if the buyer fails to close on time. Some contracts may state that the buyer has to pay a pentalty for closing late, but they still get to close.
Without knowing the specifics of your contract I can only give you a general explanation of what usually happens, you need your agent or attorney to advise you on how to proceed.
Best of luck,
John
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QUESTION: Thank you so much for the quick reply. I really appreciate your help. So if the contract stated that we must close on the 27th, and they fail to get the fund for the loan by then, does that mean we can keep their earnest money?
ANSWER: Before you cancel, you need to have your agent submit a form that gives notice to the buyer that they must close on time per the terms of the contract or you intend to cancel (usually called a "Buyer Perform or Quit" notice). This shows that you are dealing with the buyer in good faith and giving them the opportunity to close. Normally the buyer loses their earnest money if they don't meet the dates shown in the contract, but your contract might also say that they just lose the deal and get their earnest money back - I can't advise you on that without seeing it.
If you intend to keep their money, make sure you have all your facts straight and that you haven't caused any delays in the process, as the buyer is likely to fight for their money.
Best of luck,
John
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QUESTION: Thanks again John. I have another question.
The buyer signed the Notice to perform to remove all contingencies (loan included) after the 17 days were up. They failed to get the loan in on time. So escrow drew up the cancellation instruction and sent it to me and the buyer. The buyer is getting their earnest money back, but they have to pay the escrow fees ($700 total). So they'll be getting $9300 back. I have signed the instruction 7 days ago. My house is now relisted and we have a new buyer. However, I checked with the escrow officer, and they informed me that the buyer still hasn't signed the cancellation instruction.
Am I going to be able to close the new escrow (we're using a different escrow company this time) if the previous buyer still would not sign the cancellation instruction?
If they still refuse to sign for some reason and I can't close the new deal, can I sue them for damages?
Answer Why won't the buyer sign the cancellation?
If they don't respond to phone calls and nice requests within a few days, I recommend you have an attorney send a letter saying you are going to sue if they don't sign within a specific number of days. Include that you are going to ask for damages plus attorney fees and court costs.
