Seller is backing out

[Geedup]

So it is not until day 17 of escrow contingency removal or day 21 loan contingency removal when pressured by the seller the buyers earnest money deposit becomes hard or on the line aka irrevocable consideration and buyer is now fully committed then if seller decides to delay escrow by not signing grant deed seller can be held liable at this point for seller breach damages .

[The-Shoveler]

I think this is where a lot of realtors representing the seller fail the seller, that is they should get the buyer to sign a removal (or waiver) of “ALL” contingencies at the end of the contingency period.

I am not sure the deposit becomes hard until that is signed by the buyer.

Anyway just my two cents.

[bearishgurl]

This timely chart was in my e-mail this morning:

http://journal.firsttuesday.us/wp-content/uploads/Buyer-Seller-Breach.png

[moneymaker]

Could really screw things up if a chain of transactions depend on each other to go through such as contingencies to buy in order to sell, with 3 places contingent the middle person could end up with 2 mortgages. What is the highest order of contingencies realtors on here have heard of? I could definitely see why some people might have cold feet buying right now with prices high compared to the general economy, a little harder to understand why one wouldn’t want to sell.

[njtosd]

[quote=bearishgurl]This timely chart was in my e-mail this morning:

http://journal.firsttuesday.us/wp-content/uploads/Buyer-Seller-Breach.png%5B/quote%5D

Thanks BG-but this chart relates to situations where an enforceable contract is in place. You can’t breach a contract until it exists. The question is when does the contract come into being. To summarize-if the buyer can walk away at any time until the contingencies are removed, it’s not a real contract. The Steiner case sort of suggests that if the buyer can walk away then the seller should be able to walk away too. Once the buyer can’t walk away then there is consideration and an enforceable contract comes into being. I am not saying this is settled law. It could be that court could find consideration in the money and time the buyer puts into removing contingencies. I just think it’s a good idea for the buyer to give the seller a certain amount of money that is itrevocable so that there is consideration on the buyers part. Can’t hurt.

[FlyerInHi]

[quote=njtosd][quote=bearishgurl]This timely chart was in my e-mail this morning:

http://journal.firsttuesday.us/wp-content/uploads/Buyer-Seller-Breach.png%5B/quote%5D

Thanks BG-but this chart relates to situations where an enforceable contract is in place. You can’t breach a contract until it exists. The question is when does the contract come into being. To summarize-if the buyer can walk away at any time until the contingencies are removed, it’s not a real contract. The Steiner case sort of suggests that if the buyer can walk away then the seller should be able to walk away too. Once the buyer can’t walk away then there is consideration and an enforceable contract comes into being. I am not saying this is settled law. It could be that court could find consideration in the money and time the buyer puts into removing contingencies. I just think it’s a good idea for the buyer to give the seller a certain amount of money that is itrevocable so that there is consideration on the buyers part. Can’t hurt.[/quote]

very interesting. I like reading stuff like this because it makes me think.

[bearishgurl]

A seller backing out at the eleventh hour should be required to pay their buyer liquidated damages IF that buyer did everything they were supposed to in a timely manner during escrow to purchase their property. Those actual damages will vary wildly from buyer to buyer.

[bearishgurl]

[quote=njtosd][quote=bearishgurl]This timely chart was in my e-mail this morning:

http://journal.firsttuesday.us/wp-content/uploads/Buyer-Seller-Breach.png%5B/quote%5D

Thanks BG-but this chart relates to situations where an enforceable contract is in place. You can’t breach a contract until it exists. The question is when does the contract come into being. To summarize-if the buyer can walk away at any time until the contingencies are removed, it’s not a real contract. The Steiner case sort of suggests that if the buyer can walk away then the seller should be able to walk away too. Once the buyer can’t walk away then there is consideration and an enforceable contract comes into being. I am not saying this is settled law. It could be that court could find consideration in the money and time the buyer puts into removing contingencies. I just think it’s a good idea for the buyer to give the seller a certain amount of money that is itrevocable so that there is consideration on the buyers part. Can’t hurt.[/quote]Yeah, I like the idea of the $100 set aside for that purpose.

A buyer whose seller backed out “could” have their own house in escrow and some or all of their stuff in storage. They also could have given notice for the rental they are occupying and a new tenant had already been found by their LL, esp in most urban coastal areas of CA where the vacancy rate is <=3%. The buyer could also have money wrapped up in a physical inspection and/or engineer's report and have a rate lock that is soon to expire. So the buyer can be "damaged" if their seller pulls this stunt. I'm just wondering if a hundred or a few hundred non-refundable deposit from a buyer plus the buyer insisting on that extra language in the contract (as suggested in your link) might deter some sellers from accepting their offer ... especially if their listed property lies in an area with a critical shortage of housing, such as Silicon Valley. Maybe some of these sellers are so cocky that they think qualified buyers who will "overpay" for their property are a dime a dozen.

[njtosd]

[quote=bearishgurl][quote=njtosd][quote=bearishgurl]This timely chart was in my e-mail this morning:

http://journal.firsttuesday.us/wp-content/uploads/Buyer-Seller-Breach.png%5B/quote%5D

Thanks BG-but this chart relates to situations where an enforceable contract is in place. You can’t breach a contract until it exists. The question is when does the contract come into being. To summarize-if the buyer can walk away at any time until the contingencies are removed, it’s not a real contract. The Steiner case sort of suggests that if the buyer can walk away then the seller should be able to walk away too. Once the buyer can’t walk away then there is consideration and an enforceable contract comes into being. I am not saying this is settled law. It could be that court could find consideration in the money and time the buyer puts into removing contingencies. I just think it’s a good idea for the buyer to give the seller a certain amount of money that is itrevocable so that there is consideration on the buyers part. Can’t hurt.[/quote]Yeah, I like the idea of the $100 set aside for that purpose.

A buyer whose seller backed out “could” have their own house in escrow and some or all of their stuff in storage. They also could have given notice for the rental they are occupying and a new tenant had already been found by their LL, esp in most urban coastal areas of CA where the vacancy rate is <=3%. The buyer could also have money wrapped up in a physical inspection and/or engineer's report and have a rate lock that is soon to expire. So the buyer can be "damaged" if their seller pulls this stunt. I'm just wondering if a hundred or a few hundred non-refundable deposit from a buyer plus the buyer insisting on that extra language in the contract (as suggested in your link) might deter some sellers from accepting their offer ... especially if their listed property lies in an area with a critical shortage of housing, such as Silicon Valley. Maybe some of these sellers are so cocky that they think qualified buyers who will "overpay" for their property are a dime a dozen.[/quote] Or maybe savvy ones like having an out. It's not a deposit, technically. It would be something akin to paying for an option contract to consider the house for a certain period of time. Deposits are refundable. The first paragraph has to do with detrimental reliance or promissory estoppel. You get different damages for those sorts of things when it comes to real estate I think. . . and now I think I have exhausted my limited knowledge of real property law.

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