Real Estate

Buyer not closing on firm deal

  • Last Updated:
  • Oct 20th, 2017 9:52 am
[OP]
Newbie
Sep 9, 2017
27 posts
81 upvotes

Buyer not closing on firm deal

We recently sold our home. First person through made an offer at full asking 2 hours after being listed conditional upon financing and home inspection. We received another offer shortly after, also full asking but no conditions. Because we're softies, we have the first guy the chance to firm up and didn't sign back the second. He had his home inspection, and an appraisal and then firmed up and waived conditions. He requests his final walk through, and suddenly says he "smells mold in the basement and is having an allergic reaction." We as the sellers can detect 0 odour. There's never been a mold or dampness issue in the basement. No history of water penetration. He notices discoloration and watermarks on the baseboards (present at home inspection - not new) and demands a "mold inspection". We say no, we had had an incident with a bar fridge in the basement that was unplugged accidentally - there was food in it that spoiled. We cleaned it up but it may have caused watermarks on the trim. We will replace the trim. His lawyer sends a letter saying he wants the inspection or he won't close. We figure, screw it - we have nothing to hide. Go for it. He sends a guy with 2 years experience and next to no accreditations to take an air test. He doesn't do it under controlled conditions and has no knowledge of the incident with spoiled food. Sure enough test comes back extremely high spore count of penicillium (food borne mold). We get our own inspection to counter his that shows no visible signs of mold, no excess moisture and slightly above average air test. Buyer is still refusing to close. We got a quote for the remediation costs (minimal as there's no visible mold or water penetration) and are offering an abatement double the amount of the quote. He's requesting a mutual release and not proceeding to close. Should we hold him to this sale? If we relist the market has softened, and our house is vacant so it's not likely to get the same asking price. Plus we're now carrying two homes and the costs are mounting. What should we do?
124 replies
Deal Expert
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Jan 27, 2004
36662 posts
2532 upvotes
Toronto
You can chase the guy which would be more trouble than its worth.

Or sell in the softer market. This will at least take away the burden of 2. In the bigger picture... if you take this step would you be in a position to make a profit off the sale?

Thats kinda the brighter side! Bc if the guy is consistent in backing out, it will give you a really hard time...
Deal Addict
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Mar 23, 2003
2966 posts
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Hamilton
don't offer the mutual release.

Once he misses the closing date, talk to your lawyer about re listing.
Once it sells again, go after him for the difference.
At least send him scary letters from your lawyer, etc... at the bare minimum see if he relinquishes some funds.
Also, this way his downpayment is kept.

Since you have counter offers for the "mould" issue, it shouldn't be a problem. Considering you've offered solutions in writing that are above and beyond his test by someone with LESS experience.
Deal Addict
Feb 9, 2009
4486 posts
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Hold him to it -- the fool is trying to back out now.

You get to keep the deposit.

Sue him if the price is sold lower (if higher cant really sue).

And move on.
Deal Addict
Jul 3, 2011
4405 posts
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Thornhill
KristieL867234 wrote:
Sep 10th, 2017 8:19 pm
His lawyer sends a letter saying he wants the inspection or he won't close. We figure, screw it - we have nothing to hide. Go for it. He sends a guy with 2 years experience and next to no accreditations to take an air test.
Nowhere in there do I see that you consulted with your attorney either upon receiving the letter and before acquiescing to the threat or after.

Seek legal advice.

It's probably too late to save this deal though.
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Jul 3, 2011
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Thornhill
This is not good advice.

Mitigating a loss must begin immediately and often with something called tender.
sidshock wrote:
Sep 10th, 2017 8:53 pm
don't offer the mutual release.

Once he misses the closing date, talk to your lawyer about re listing.
Once it sells again, go after him for the difference.
At least send him scary letters from your lawyer, etc... at the bare minimum see if he relinquishes some funds.
Also, this way his downpayment is kept.

Since you have counter offers for the "mould" issue, it shouldn't be a problem. Considering you've offered solutions in writing that are above and beyond his test by someone with LESS experience.
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Sep 8, 2007
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Way Out of GTA
Sorry to hear OP this is an unfortunate after effect of prices dropping after the sale was negotiated.

- this 'final walkthru' more and more I've seen for scumbag buyers that have either bought unconditionally or cleared conditions to either a) look for holdback/ransom to close or b) use as ammo to refuse to close as in this case
- the fact that scumbag did his home inspections and cleared the condition, you've been accommodative and offered remediation costs, it's clear the mold issue was simply what he was going to use to try to escape
- I think it would be pretty clear in the eyes of the courts exactly what this buyer did and basically just didn't want to close on a valid contract
- he's hoping that you fall into "the don't fight it, just suck up the huge loss because fighting in court isn't worth it" but I'd suggest your case is very strong

We need some more info. What was the date the sale agreement was signed. What is the closing date? How much do you think is the difference between the sale price and what you could get now?
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Mar 23, 2003
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Hamilton
licenced wrote:
Sep 10th, 2017 9:21 pm
This is not good advice.

Mitigating a loss must begin immediately and often with something called tender.
so offer mutual release and give up a prospect of who knows how much ?
I dunno....
I'm not saying it's easy. But getting your money rarely is, unless you already have a lot of it.

I guess it depends how much fight OP has in them.
Put it up after the failed closing date.
sell it.
have some legal jargon sent over at the min to see if it'll scare 'em into paying the diff.
Doesn't hurt.
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Mar 23, 2003
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Hamilton
Sanyo wrote:
Sep 10th, 2017 8:57 pm
Hold him to it -- the fool is trying to back out now.

You get to keep the deposit.

Sue him if the price is sold lower (if higher cant really sue).

And move on.
Doesn't the deposit goto the Agent first? Which literally eats almost all of it usually.
Also, needs some legal proceeding approval and time until it's released?
I think they need to sue and win to actually see some $$.
But I agree, don't release. F that.
Deal Addict
Jul 3, 2011
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Thornhill
As far as I can see.

This buyer will get their deposit without question.

The seller allowed the test without provisions.

The issue is mould - a toxin.

The buyer will get to walk.

Get legal advice first before presuming that you know your property.



sidshock wrote:
Sep 10th, 2017 9:27 pm
so offer mutual release and give up a prospect of who knows how much ?
I dunno....
I'm not saying it's easy. But getting your money rarely is, unless you already have a lot of it.

I guess it depends how much fight OP has in them.
Put it up after the failed closing date.
sell it.
have some legal jargon sent over at the min to see if it'll scare 'em into paying the diff.
Doesn't hurt.
[OP]
Newbie
Sep 9, 2017
27 posts
81 upvotes
We consulted our lawyer immediately when he requested the inspection the first time. He said we will tell him no further inspections so we sent a letter to that affect. His lawyer sent another stating basically if we didn't allow the inspection then he would consider not "assuming" the property. Our lawyer said, if you don't do it he won't close, if you do it he may still. So we went ahead.
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Mar 23, 2003
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Hamilton
KristieL867234 wrote:
Sep 10th, 2017 9:50 pm
We consulted our lawyer immediately when he requested the inspection the first time. He said we will tell him no further inspections so we sent a letter to that affect. His lawyer sent another stating basically if we didn't allow the inspection then he would consider not "assuming" the property. Our lawyer said, if you don't do it he won't close, if you do it he may still. So we went ahead.
He's got proof. fine. So do you.
However, you offered to pay for the abatement.
You offered a solution.
How far you wanna take this is up to you and your lawyer/bank account.
Deal Addict
Jul 3, 2011
4405 posts
1672 upvotes
Thornhill
KristieL867234 wrote:
Sep 10th, 2017 9:50 pm
We consulted our lawyer immediately when he requested the inspection the first time. He said we will tell him no further inspections so we sent a letter to that affect. His lawyer sent another stating basically if we didn't allow the inspection then he would consider not "assuming" the property. Our lawyer said, if you don't do it he won't close, if you do it he may still. So we went ahead.
Upon first time to me means the conditional offer.

If you mean when they came back and said they smell mould then if that was all the your lawyer said to you I'd be very surprised.

I believe you saw your position this way
We figure, screw it - we have nothing to hide. Go for it.
[OP]
Newbie
Sep 9, 2017
27 posts
81 upvotes
The closing date was September 1st - it's already past. Initially he requested an extension so we could have time to come to an agreement. He requested his final walk through 2 weeks before the closing, so mid August. His home inspection was completed 3 weeks prior. Nothing changed with our home in the 3 weeks. He stated he "wasn't interested in a competing inspection or a differing opinion of experts" so we asked a contractor to bid on the work as if it was worst case scenario. Our lawyer sent his the quote and asked him to call him to discuss a possible abatement (price reduction) and steps forward. He never called - instead sent a letter stating he wanted a mutual release. The quote was only $7k so I'm guessing it wasn't enough for him, as I do think this was part of a bigger plan to get the cost down significantly in a softer market. We have a solid amount of equity and were willing to give up $10k to just have things firm up. Our realtor thinks we could end up selling for "10's of thousands of dollars" less. That's not including the carrying costs we're incurring.
[OP]
Newbie
Sep 9, 2017
27 posts
81 upvotes
Not a conditional offer at this point. As mentioned, this was a result of his final walk thru - after he had waived all conditions and firmed up. We had another offer on the property for the same $ and were in the middle of signing it back when he came back firm. So we could have sold it otherwise. Perhaps he felt pressured to firm up or he'd lose it and is now feeling buyer's remorse.

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