Posted on: 29 December 2015
Most real estate closings are congenial affairs where both buyers and sellers are eager to complete the transaction at the closing table. However, not all closings end happily, especially when one party fails to abide by the real estate purchase contract that was determined to be fully ratified and binding several weeks earlier. For sellers, this type of failure on the part of buyers can be extremely damaging, especially in cases where the buyers simply do not show up at the closing table, even though the sellers have already vacated the home they are selling and proceeded to rent or purchase another. If you are a home seller who finds themselves jilted at the closing table, make sure you understand the following three things and how they will affect your particular situation.
- Were all contingencies met under the contract? Financing and home inspection contingencies are two of the most commonly used in real estate contracts, but there can be many others. Review your sales contract, along with any amendments to make sure that any contingencies outlined in your agreement are fully satisfied. An example of a last minute issue that could interfere with a closing could be the buyers finding something seriously amiss in their final walk-through of the property which causes them to refuse to close.
- Under what instances is a seller legally entitled to the buyer's earnest money deposit in your state and does your contract meet those terms? Many sellers routinely believe they can keep the earnest money in any case where the buyer fails to close, but this is not always true. For example, according to the Missouri Real Estate Commission Code of State Regulations, 20 CSR 2250-8.130 Earnest and Escrow Money; Disputes:Section 2, both parties must agree in writing before the earnest money can be disbursed to either party, in the event a transaction fails to close. Because of this, it is possible that an earnest money deposit can remain in limbo in an escrow account, should no such agreement be successfully negotiated between the parties.
- What ramifications apply to the seller in regards to the existing real estate listing contract? This is especially important because, depending on the wording of the listing contact, sellers can find themselves facing a number of problems, including owing their agent a full sales commission or being unable to take the property off the market, even if they need to move back in.
No matter why it happens, a real estate transaction that fails to close can have serious legal and financial ramifications for the sellers. If you are facing this situation, it is important to seek the legal representation of a real estate attorney like Byron Huffman, PC or others immediately in order to minimize your risks and protect your interests.Share