- Joined
- Oct 26, 2016
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$313,000 Sale Price. $5000 credit toward closing costs. 2.5% Commission ($7,825) to Buyers’ Agent. Sellers agree to pay ‘Owner’s Title Insurance’. Buyers made a timely $5000 initial Earnest Money Deposit with a title company and agreed to pursue an 80% loan. 55+ age requirement. 32unit building built in 1969 in the Tampa Bay Area, FL. 2BR/2B 1300 sqft condo, recently remodeled. Buyers and Sellers went into contract Saturday April 6, 2024. Closing set for on/before Friday May 10, 2024.
Buyers hired an Inspector and accepted the property in it’s ‘AS IS’ condition.
Subject Property underwent an Appraisal satisfactory to the Buyers’ chosen Lender.
Deal hits a snag on Day18 (Wednesday). Buyers’ Agent notifies Sellers a Condominium Project Questionnaire (Fannie Mae Form 1076) became a point of contention and needed clarification for the loan process to move forward. Sellers discussed the issue later that same day separately with the Loan Agent and with the Condo Board President. The Board President concludes the management company completed the Form 1076 without authorization and with gross inaccuracies.
Day19 (Thursday), the Board President spoke to the Loan Agent by phone. Sellers routinely updated the Buyers’ Agent.
Day20 (Friday), Board President emailed the Loan Agent requesting an opportunity to resubmit an accurate and authorized Form 1076.
Day23 (Monday), Loan Agent emailed the Board President a new Form 1076. Again, Sellers continue to update the Buyers Agent.
Day24 (Tuesday), Buyers Agent called Sellers stating Buyers changed their minds. Buyers request in writing Sellers sign a ‘Release and Cancellation of Contract’. Sellers refuse. Obviously Buyers want the entire $5000 Earnest Money Deposit refunded. Sellers contend the Contract requires the Buyers to complete the Loan Approval Process, specifically, the Contract states, “Buyer’s failure to use good faith and diligent effort to obtain a Loan Approval during the Loan Approval Period shall be considered a default under the terms of this Contract.” Also, the Board President, later that same day, resubmitted by email the corrected Form 1076.
Day25 (Wednesday), Sellers, in advance of leaving town on vacation the next day, sign all the closing documents in the morning at the title company. That afternoon, the Closing Agent for the title company receives an email from the Loan Agent formally rejecting the Buyers loan application. Again, Sellers refuse to sign a ‘Release’. Sellers contend nothing absolves the Buyers from their Bad Faith attempt to withdraw from the contract prematurely. The Buyers, in the opinion of the Sellers, used an obscure lender (Embrace Home Loans out of Rhode Island).
Sellers requested a face-to-face meeting with the Buyers to negotiate a settlement. Sellers would have offered to split the $5000 Earnest Money Deposit 50/50. Buyers refused to negotiate.
Day40 (Thursday May 16, 2024), Sellers file a $5000 (plus court costs) Pro Se Small Claim with the County Clerk. $320 filing fee + $104 Service Process fee (two out-of-county defendants). By the next day, the Clerk already issued a case # and a Pre-trial Conference date (June 12th).
How do you think this plays out? Do you think the Buyers signal a desire to settle? Sellers stood to bank $293,668 on the deal. If it goes all the way to the hearing officer, how do you expect the hearing officer to rule?
What other information do you need to render an opinion?
Disclosure: I own an independent real estate company. In the past 40+ years, I have only filed one other real estate-related Small Claims. In that case, I represented two
young buyers. I sued for commission after the Seller-Agent backed out of the deal. The lawsuit induced the Seller-Agent to reconsider. We closed the deal!
Buyers hired an Inspector and accepted the property in it’s ‘AS IS’ condition.
Subject Property underwent an Appraisal satisfactory to the Buyers’ chosen Lender.
Deal hits a snag on Day18 (Wednesday). Buyers’ Agent notifies Sellers a Condominium Project Questionnaire (Fannie Mae Form 1076) became a point of contention and needed clarification for the loan process to move forward. Sellers discussed the issue later that same day separately with the Loan Agent and with the Condo Board President. The Board President concludes the management company completed the Form 1076 without authorization and with gross inaccuracies.
Day19 (Thursday), the Board President spoke to the Loan Agent by phone. Sellers routinely updated the Buyers’ Agent.
Day20 (Friday), Board President emailed the Loan Agent requesting an opportunity to resubmit an accurate and authorized Form 1076.
Day23 (Monday), Loan Agent emailed the Board President a new Form 1076. Again, Sellers continue to update the Buyers Agent.
Day24 (Tuesday), Buyers Agent called Sellers stating Buyers changed their minds. Buyers request in writing Sellers sign a ‘Release and Cancellation of Contract’. Sellers refuse. Obviously Buyers want the entire $5000 Earnest Money Deposit refunded. Sellers contend the Contract requires the Buyers to complete the Loan Approval Process, specifically, the Contract states, “Buyer’s failure to use good faith and diligent effort to obtain a Loan Approval during the Loan Approval Period shall be considered a default under the terms of this Contract.” Also, the Board President, later that same day, resubmitted by email the corrected Form 1076.
Day25 (Wednesday), Sellers, in advance of leaving town on vacation the next day, sign all the closing documents in the morning at the title company. That afternoon, the Closing Agent for the title company receives an email from the Loan Agent formally rejecting the Buyers loan application. Again, Sellers refuse to sign a ‘Release’. Sellers contend nothing absolves the Buyers from their Bad Faith attempt to withdraw from the contract prematurely. The Buyers, in the opinion of the Sellers, used an obscure lender (Embrace Home Loans out of Rhode Island).
Sellers requested a face-to-face meeting with the Buyers to negotiate a settlement. Sellers would have offered to split the $5000 Earnest Money Deposit 50/50. Buyers refused to negotiate.
Day40 (Thursday May 16, 2024), Sellers file a $5000 (plus court costs) Pro Se Small Claim with the County Clerk. $320 filing fee + $104 Service Process fee (two out-of-county defendants). By the next day, the Clerk already issued a case # and a Pre-trial Conference date (June 12th).
How do you think this plays out? Do you think the Buyers signal a desire to settle? Sellers stood to bank $293,668 on the deal. If it goes all the way to the hearing officer, how do you expect the hearing officer to rule?
What other information do you need to render an opinion?
Disclosure: I own an independent real estate company. In the past 40+ years, I have only filed one other real estate-related Small Claims. In that case, I represented two
young buyers. I sued for commission after the Seller-Agent backed out of the deal. The lawsuit induced the Seller-Agent to reconsider. We closed the deal!
right now.