Trying to sell house...buyers backing out.

[LadyBeBop]

My in-laws are trying to sell their house in Tennessee (they want to live closer to my husband). The house was on the market for over a year before a married couple made an offer. After two weeks of offers and counter-offers, they came to an agreement and a contract was signed. All cash, no mortgage.

Closing was supposed to take place at the end of May with the buyers taking occupancy of the house immediately. (My in-laws would stay with us while they look for a house up here).

The house passed inspection last week, and my in-laws are slowly packing (and selling some of their furniture). Yesterday, the house underwent a simple freon inspection. The amount of freon was below the national average.

The buyer said that wasn't good enough, and backed out of the contract.

Notice I said buyer, and not buyers. It turns out that the marriage was on the rocks, and now the couple has separated.

Still, they signed a contract and paid earnest money (I'm not sure how much). My in-laws has already sold some of their furniture. They don't have a living room suite (they were going to buy a new one up here).

DH convinced them to see a lawyer to examine their options. Do they have much of a chance to make them buy?

 

[lost*in*cyberspace]

No, the buyers can't be forced to buy. If they were able to cancel the contract because of the freon issue, passing the inspection must have been a contingency in the contract. If they backed out for an invalid reason, they should forfeit the earnest money.

Houses fall out of contract all the time. It sucks, but until the closing, it's not a done deal. It would be a waste of time and money to pursue this legally.

 

[crisi]

None at all. They MIGHT be able to keep the earnest money, but probably not since it was likely a contingency.

 

[sonnyjane]

Houses fall out of contract all the time. It sucks, but until the closing, it's not a done deal. It would be a waste of time and money to pursue this legally.

Yeah this. Out of my friends that have sold their homes, I'd say most of them first suffered through an encounter with buyers that backed out.

 

[StitchesGr8Fan]

That is why contracts have contingencies. It sucks, but it's the truth. They MIGHT get to keep the earnest money, but the buyers can't be forced to buy. Even if there wasn't a contingency, I believe a buyer can change their mind up until closing and all the owner gets is the earnest money.

 

[Straitlover]

Do you mean freon or radon? Freon is what's in your air conditioner.

 

[LadyBeBop]

Yeah this. Out of my friends that have sold their homes, I'd say most of them first suffered through an encounter with buyers that backed out.

Actually, this is the second couple that backed out. The first one...there was a verbal agreement, but no written contract. Turned out, that couple overextended themselves.

The freon should really be a non-issue since it was well below industry standards, right? It has to be something else. Probably the pending divorce.

 

[Sundancer330]

What is a freon inspection, the only freon I know of would be in an A/C unit.

 

[lost*in*cyberspace]

What is a freon inspection, the only freon I know of would be in an A/C unit.

I was wondering what that is myself. I didn't realize freon was still being used.

 

[lost*in*cyberspace]

Do you mean freon or radon? Freon is what's in your air conditioner.

But a lower than national average of radon would be a good thing!

 

[Sundancer330]

Sounds more like a Radon inspection with high numbers, does this house have a basement.

 

[Allison]

No.

 

[Sundancer330]

I would get a hold of the inspection report and see what it says so the problem can be fixed so when the next buyer comes along the problem is gone.

 

[AnnaS]

The buyers paid for the inspection, if they are not willing to share it then they might have to get their own or offer them half the money maybe?

 

[tvguy]

The home inspection found an undisclosed hazard. Your parents may not have known about it to disclose it, but certainly that is reason enough to cancel the sale, and I sure hope the buyers get all their money back. The house has an issue that was not disclosed.

 

[barkley]

this is the very reason when we sold our prior home our very experienced realtor had us get inspections prior to listing for the top inspection issues in our area that caused deals to go south or generate tremendous price decrease negotiations. for the few hundreds of dollars in inspections fees that it cost us (didn't pay until closing) we knew exactly what the condition our house was.

even with that-if we agreed to a contract with the stipulation that the sale was contingent on the house inspection (vs. the house PASSING inspection-big difference), a contracted buyer could use any issue raised in the inspection to exit the contract.

 

[mistysue]

The home inspection found an undisclosed hazard. Your parents may not have known about it to disclose it, but certainly that is reason enough to cancel the sale, and I sure hope the buyers get all their money back. The house has an issue that was not disclosed.

From what we know in this thread, this doesn't seem to be true.

If the buyer can't substantiate a reason for backing out the seller keeps the money. Gas tests have pass and fail levels. National averages might not mean a lot, are there regional levels? Recommended levels? If they are saying no based on an inspection item they would have to disclose the item to be able to get their money back.

 

[supersnoop]

The buyers paid for the inspection, if they are not willing to share it then they might have to get their own or offer them half the money maybe?

They would have to share the report in order for it to qualify for the contingency clause.

 

[AnnaS]

They would have to share the report in order for it to qualify for the contingency clause.

That makes sense - they would need to show their proof of the problem/s with the house in order to back out. Would showing it to the buyer's attorney be sufficient?

It is worth it for the seller to get their own prior to selling - great idea so they know what might come up.

 

[jerseygal]

Sounds to me that the contingency period for home inspection would have been over awhile ago. Read the contract of sale. If the home inspection "contingency" clause time has elapsed, the buyers are
out of luck and will loose their deposit if they back out!

If your parents have already packed up and are that close to closing, something about this "doesn't sound right"!

Usually a contingency such as home inspection occurs in the very beginning of a contract for home sale!
The buyers could be using the sudden change in their marital situation for a motive for thinking of backing out. Plain and simple...Once all contingencies are met and satisfied in a contract and buyers back out, your parents can keep the buyers deposit.

Read the contract carefully and consult an attorney who is "seasoned" in real estate closings. Best of luck!