HELP need your feedback on issue fast!

[calgary350z]

Hey everyone, I know there are alot of real estate professionals and people who might be able to ease my mind on an huge issue I'm stuck in. I sold my townhouse to a younger guyand his girlfriend and used a real estate agent to this. It went thru all the proper steps of getting the conditions of financing lifted by his mortgage brokerage and all other condtions where waived by the buyer. This was all done at the end of Febuary and then yesterday I get home from out of town and discover that the buyer is walking away because the mortgage company fucked up and appoved his financing without the banks absolute final approval.
Needless to say I'm know completely screwed because my new house that I have a $48,000 deposit on needs to be paid for in less than ten days or I lose the deposit, lot apprication (around $30,000) and all the time and effort myself and my wife put in to building a new house.
My question is who is liable the buyer or the brokerage who gave my real estate agent the final approval to meet the requirments of the sale. I also do not qualify to carry both mortgages.

Has anybody got any advice or been in this messed of a situation? My real estate agent says in thirty years has never seen this before.

[2BLUE]

WOW...That really sucks.

Hope the best for you.

[Weapon_R]

You need to find out exactly why the buyer backed out. If it wasn't in his control, you are pretty much out of luck.

[barmanjay]

Its a toss between the buyer and mortgage lender

since the buyer waived all conditions the owness is on them.

however since the back made mistakes and opted out after the deal is completed, the bank should take responsibility as well.


If you would like I know an excellent mortgage broker or will do high risk for both you and the old buyer

I also know someone who does short term loans if needed ie: the deposit of your new house.

If you think it's an agency relationship issue with your realtor or brokerage then visit http://www.reca.ca/

[calgary350z]

it was because the bank rejected his fianancing after the brokerage already said it was 100% done deal. The buyer still wants it but the brokarage fucked up and said it was okay. To me it looks like I can sue the brokerage

[Weapon_R]

Something doesn't add up with their stories. When you're approved, you're approved. Maybe the buyer came in with a preapproval, or maybe he's lying about his qualification.

You should look for someone to help you qualify in the interim, and worry about suing later.

[HRD2PLZ]

Originally posted by Weapon_R
Something doesn't add up with their stories. When you're approved, you're approved. Maybe the buyer came in with a preapproval, or maybe he's lying about his qualification.

You should look for someone to help you qualify in the interim, and worry about suing later.

^^^ I agree. Their story doesn't sound right. The mortgage company is the bank. So, either someone royally screwed up with the approval process or they are walking for another reason. Depending on your listing contract, you should be able to keep their deposit (probably only $5000-ish though) and you'll have to take them to court and sue for whatever you feel you are owed.

The bank will never accept responsibility, fault will always come back to the mortgage broker, the buyer and possibly the buyer's Realtor.

Best of luck, hope everything works out.

[barmanjay]

you have pm

[Khyron]

If the bank sent approval documents, and then the bank went back and said "Ooops, we shouldn't have approved this one" then they should be responsible. Definately sounds like a big mess though. Does your new house have a condition of sale "subject to sale of old house"? Most do, and since that's no longer true you can possibly get out of your new house until this is resolved. Pass the pain up the chain.

[calgary350z]

It is a new house thru a builder and if I do not come up with the money on the possesion date which is April the the tenth I lose my $48,000 and they can in turn sue me for extra damages. I would carry two mortgages but my broker said no one would approve it, he tried very hard and he is very good at getting out of tight situations. I would need a co signer at best but do not have anyone that would quilify

[barmanjay]

Again,.. I have a mortgage broker who I am pretty sure can help you.

even if it's a "blanket" mortgage,.. or maybe set it up as 2nd or 3rd mortgages just to help you get out of this mess.

she has been the only one out of a dozen that has been able to help me and secure lenders for me, when others can't.

[lilmira]

I'm guessing that the buyer screwed up by waiving the condition before the mortgage has been approved. Or the buyer is pre-approved based on inaccurate information
provided by the buyer. Once the lender confirm the information, they rejected the application.

The buyer should be liable to the loss from the breach of contract. But if the buyer can't even get mortgage approved, he/she may not even be able to pay you anything at all other than the deposit. I don't think either agent will be liable at all.

The win-win strategy is to help the buyer's mortgage approved.

[S4maniac]

Where are the agents on this board? Here's the scoop (and I'm not an agent) assuming the buyer removed his "subject to financing" condition.

The buyer forfeits his deposit to you.
The buyer is liable for the loss of "profit" if you have to firesale your place. This is the amount you sell your place to another purchaser if its less than what the original purchaser agreed.
The buyer is liable for lost opportunity ... this is very tough to quantify.


You cannot go after his broker or mortgage broker. You did not have a contract with them. The purchaser would probably go after them himself if you bent him over and took his deposit as well as sued for loss of profit.

All the brokers on this board took contract law. They can vouch for the above.

[canadian_hustla]

Originally posted by S4maniac

The buyer is liable for the loss of "profit" if you have to firesale your place. This is the amount you sell your place to another purchaser if its less than what the original purchaser agreed.
The buyer is liable for lost opportunity ... this is very tough to quantify.

Interesting information here, do you have any proof for these two statements? I am not confirming or denying their validity.. i am just looking for another opinion. I know that AREA conditions acknowledge that the deposit will be forfitted. I also know that the seller can sue the buyer for legal fees regarding restoration of title, and other damages.

I have never heard of the buyer being liable for the difference in price if the property needs to be sold again at a lower price

calling out all realtors!

[turbotrip]

Originally posted by calgary350z
It is a new house thru a builder and if I do not come up with the money on the possesion date which is April the the tenth I lose my $48,000 and they can in turn sue me for extra damages. I would carry two mortgages but my broker said no one would approve it, he tried very hard and he is very good at getting out of tight situations. I would need a co signer at best but do not have anyone that would quilify

who is the builder? if your on good terms with the builder they can push the possession date back a bit. i had our builder push the possession date back about 15 days pretty recently so try talking to them if u need a bit longer.

[S4maniac]

Originally posted by canadian_hustla


Interesting information here, do you have any proof for these two statements? I am not confirming or denying their validity.. i am just looking for another opinion. I know that AREA conditions acknowledge that the deposit will be forfitted. I also know that the seller can sue the buyer for legal fees regarding restoration of title, and other damages.

I have never heard of the buyer being liable for the difference in price if the property needs to be sold again at a lower price

calling out all realtors!

Its all part of contract law. You are entitled to be made economically whole. Nothing more. To determine the amount of loss, you'd have to resell to another party. If thats at a better price, good on ya. At a lower price, the forfeited buyer is liable for the diff. It would have to be a reasonable sale given the conditions. No blowing out the house at a buck. A distressed sale is a reasonable condition.

It does look like a lawyer would have fun with your case.

But like lilmira said, its always best if you could somehow make the original deal happen.

[calgary350z]

The problem is the buyer and my realtor was given a letter signed off by the brokerage saying it was 100% approved and then when the buyer went to get the transfer of title started and the procedes they then said oops we should have not approved you.
He wants to buy it still but the bank and all the other options say he does not qualify. My realtor talked to the bank that the broker represents and they even said the broker is at fault and jumped the gun and had this finalized.

What a mess, and dont see how the brokerage is not at fault and cant be legally responsible once it is a final sale and financing was appoved by them.

[HRD2PLZ]

Originally posted by calgary350z
The problem is the buyer and my realtor was given a letter signed off by the brokerage saying it was 100% approved and then when the buyer went to get the transfer of title started and the procedes they then said oops we should have not approved you.
He wants to buy it still but the bank and all the other options say he does not qualify. My realtor talked to the bank that the broker represents and they even said the broker is at fault and jumped the gun and had this finalized.

What a mess, and dont see how the brokerage is not at fault and cant be legally responsible once it is a final sale and financing was appoved by them.

Quite often lender's will conditionally approve financing so is it possible this was the case? Possibly the buyer didn't or couldn't meet the conditions of the approval? Maybe someone can co-sign for this buyer? Your best bet is going to be trying to save this sale. You should probably consult with your Realtor to see what options you have at this point.

[lilmira]

So you are saying that the buyer has a letter of approval from the broker, not the lender? I'm going through the process of upgrading to a house myself. When I was approved for the mortgage, I had the document from the lender via the broker, not just some letter from the broker. That may be the origin of the problem. I don't think the brokerage has any say on the approval at all, I'm just guessing here.

[S4maniac]

Originally posted by calgary350z
The problem is the buyer and my realtor was given a letter signed off by the brokerage saying it was 100% approved and then when the buyer went to get the transfer of title started and the procedes they then said oops we should have not approved you.
He wants to buy it still but the bank and all the other options say he does not qualify. My realtor talked to the bank that the broker represents and they even said the broker is at fault and jumped the gun and had this finalized.

What a mess, and dont see how the brokerage is not at fault and cant be legally responsible once it is a final sale and financing was appoved by them.

What a mess! Still, unfortunately, you do not have an issue with the brokerage. You have a contract with the buyer. You sue the buyer, the buyer would have to sue the brokerage.

All this assumes the buyer is being honest when they say it all went sideways at the 11th hour. Something smells wrong here.