Where does the buck stop if a buyer contingency was not removed
Posted in the Real Estate Forum
#1 Jun 19, 2013
I am selling my home in a small town in New Mexico. I listed with a well-known and respected agent/broker who has worked here for several years.
I put my home on the market just before leaving on a 2 month trip out of the country.
Ten days after I left, I got an offer on the house for nearly full-price, a cash buy, no appraisal, no home inspection. I accepted the offer on April 15th, which is the effective date of the contract. The buyer is represented by an agent in the same office as my broker/agent, and she has responsibility for that agent.
The contract stipulated that the buyers would show proof of funds within 20 days of the signed contract.
My realtor emailed me on May 2 and said the buyers wanted to move up the closing date, which was scheduled to take place on June 19, two weeks after I returned from my trip.
I asked when they wanted to close, and the response was "they would close tomorrow if that was possible". I wrote back that I wasn't able to close until I returned but would try to get my things moved as soon as possible to move up the closing date.
When I returned home I called my realtor and said that I could close in four days. She said the buyers funds for the house hadn't cleared yet, but would shortly, and she'd let me know when they were ready.
Five days later I hadn't heard anything so I contacted my agent. I pointed out that we were out of contract since they did not have the funds and should have provided proof of funds as of May 5th. My agent fumbled around and then said she would get back to me.
When she did, she told me the buyer's funds were coming from a medical lawsuit, and there was a letter in the file from their lawyer stating that they were due a settlement of $295,000. However, subsequent to making the offer on the house, the husband (plaintiff in the lawsuit) had a second surgery and additional problems were revealed. His lawyer advised him not to accept the settlement but to go for more money, which the buyer agreed to.
This means from May 5th until I returned on June 6th, we were out of contract, although I was not told, and my agent had designated my house as being under contract. To my knowledge, she did not indicate that back up offers were being accepted.
The lawyers would not provide a second letter stating the amount of the award or the date they would be available.
I emailed my agent, asking when the buyers knew this, when they informed their agent, and why she was not taking back up offers in the month I was gone. I got no answer to these questions.
My question is this.... am I entitled to the buyer's earnest money if they failed to comply with the proof of funds clause, and kept the information about the status of their funds from their agent?
If they did inform their agent and that agent did not inform my agent, what is my recourse?
If my agent was informed and chose not to inform me, what is my recourse?
Thanks for any advice!
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