27. August 2012 14:11
Ok Seller you have entered into a contract to sell your home to Buyer #1. You now know that this buyer is having trouble obtaining a loan. The buyer #1 has reached the time agreed to in the purchase agreement (CAR form RPA-CA) paragraph 14 (b) 1 to release contingencies and you the seller have performed all of your legal obligations of the contract. You now properly serve the buyer with notice to buyer to perform (CAR form NBP or Demand to close Escrow (CAR for DCE. The buyer #1 does not respond. Now you the seller serve buyer #1with a notice to cancel the contract (CAR form CC). Buyer #1 refuses to sign. This scenario very rarely happens, but it could and this when you need an attorney. The following are avenues you might pursue, but you should discuss them with your attorney. First of all escrow will not release the deposit without mutually agreed instructions signed by both the buyer and seller. Second escrow cannot give you legal advice and the same goes for your agent or broker. Suppose now a buyer #2 comes along and is able and willing to enter into a purchase agreement with you to buy your home. What do you do now? Well you can sign the purchase agreement with buyer #2 and open another escrow. In this writers opinion that is very risky and can really complicate the situation. Probably a much better way is to sign a purchase agreement with buyer #2 and also attach as part of the contract a Purchase Agreement Addendum (CAR Form PPA) and check paragraph 1. This gives you and buyer #2 a lot more flexibility. It can be agreed to that buyer #2’s deposit check will remained not cashed and the time periods for buyer to perform will not start until you the seller have provided buyer #2 with a copies of the cancellation of the prior contract and escrow. So what it means it that when the prior contract is cancelled buyer #2 automatically falls into place and will be under contract. Remember when you and buyer #1 entered in a contract with both signing the purchase agreement (CAR for RPA-CA), paragraph 14 (F) states that unless a good faith dispute exists, both buyer and seller agree to sign a cancellation of contract. Why would a buyer create this type of situation if no good faith dispute exists? Who knows, but if this happens to you, the only one that can sort it all out and protect you is an attorney. Do your due diligence from the beginning. Make sure your buyer has a sizeable deposit and that you receive the documents that the buyer has the funds to close the transaction including the down payment.