Legal Question in Real Estate Law in Utah
buyer backing out on last days
We have a man who sign a contract agreeing to the purchase price and 'as is' home. My husband has been deployed so we didn't have time to fix everything. Only thing wrong was taht the downstairs lights were not working. It was signed July 6. His inspection, set by him, due july19. Appraisal was done before July24, and passed well. He has loan and all. Now he said he wouldn't sign the 28th because he decided he wanted a home inspection now. He chose not to do one on time. He said nothing until I had traveled to the town to sign papers. I changed plans and all to sign before the weekend to accommodate him. He said he was ready to sign but had a question about sprinkling system. (To close July 31.) He poked a hole in the sprinkling system pipe and said we had faulty system so he wanted inspection. He told our neighbor he poked a shovel in and got a gyser. I know he will loose earnest money, but have been told he is obligated now because he set the deadlines and that we have grounds to sue. I don'twant to be snotty, but I need to have him pay mortgage until it sells or something. I have Power of Atty and don't know what to do.
2 Answers from Attorneys
Re: buyer backing out on last days
Hello,
If your contract was a Uniform Real Estate Contract, the one used by real estate agents, it gives you 3 options in the event of a default by the seller: 1: keep the earnest money; 2: return the earnest money and sue for your actual damages (you have to calculate the dollars precisely for it to stand up in court); 3: sue for "specific performance," which means to force the seller to sell (which ties up the case in court for an unknown length of time).
The Seller is entitled to a "walk through" to see that the house is in the represented condition as stated in the contract and the disclosure documents, but he is not entitled after the time limit has passed to have a formal house inspection.
You should probably see a local attorney and have him/her contact the seller immediately with appropriate threats (which may or may not persuade seller to be more reasonable.) Of course, you can allow him to have the inspection and make adjustments in the terms of the agreement that are agreeable to both you and the seller. These sorts of cases frequently end in a sort of stand-off in that both the buyer and seller are very unhappy but go through with the deal on some adjusted terms because they both want to close the deal.
You and/or your attorney should point out to seller rather forcefully that the sale is an "as is" sale and that it doesn't matter what the inspection or walk-through reveals.
Parenthetically I should add that "as is" clauses are frequently invalidated by courts, so in my view you have a great psychological advantage in having the as-is provision, but if you go to court it may not hold up.
Good luck.
Re: buyer backing out on last days
Utah approved Real Estate Purchase Agreements provide that if the buyer does not get he inspections by the date stated in the Agreement, that the buyer waives those inspections. Send a regisered return receipt letter to th buyer telling them to close or you will sue. You can do one of the following (1) Keep the earnest money and cancel the sale; (2) Sue to make the buyer purchase the property; (3) Sue for your damages under the contract. You may call if you have questions.