Contracts signed closing set Buyers trying to pull out

"If i hired a solicitor at great expence for legal advice and they based their advice on "karma" i would burn a track in the carpet running out the door. I would then probably report them to the law society!!"

Read what was posted.

mf
 
Ive heard this before about people going sale agreed then pulling out. Two reasons:

Public opinion is noticing house prices falling, therefore some people are holding out for better deals
or more likely
They had received mortgage approval to the max of their salaries, the recent ECB rate has reduced wat they can borrow, hence they can't pay the agreed price.
 
LUFC said:
They had received mortgage approval to the max of their salaries, the recent ECB rate has reduced wat they can borrow, hence they can't pay the agreed price.
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Unless it has been a considerable time since the buyers got approval this shouldn't affect them. Lenders usually only re-assess the application if the original AIP has lapsed, which takes 3-6 months. Generally if there has only been one ECB increase the lender will allow the applicants to borrow the amount they had originally been approved for. Also, a lot of lenders have changed their criteria recently allowing borrowers to borrow more so I don't think this is as much of a factor as some people are making out. I think people are less willing to commit to huge mortgages with further interest rate increases on the way and all the talk of falling house prices.
 
Mf1 i dont question your honesty and integrity but would imagine that most people seeking the advice of a solicitor would not do so seeking moral guidance. There are many others who would be in a better position to offer this ( at no cost!)
 
The OP asked for an opinion MF1 was good enough to give both legal standing and his own personal opinion. I dont understand why anyone criticise him for that -im sure the O.P appreciates its
 
You can be sure that when you insist on them completing or else you will forfeit their deposit that will concentrate their minds! If they have a genuine reason they will be quick to tell you..but dont fall for any old sob story.If you feel bad about keeping their deposit you can review matters after you have sold to a second purchaser and you can assess exactly how much the first purchaser cost you by pulling out. If less than their deposit you can if you want at that point give them back the excess on the basis of not wanting to profit from their misfortune but that will be a matter for your own conscience not a legal obligation
 
Aileen2 said:
amgd28 - once the contracts are signed the seller cannot pull out. The buyer can sue to enforce the contract.
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Exactly my point! in the situation I described, the buyer would hardly have a 'moral dilemma' about suing to enforce the contract. Thus I cannot for the life of me see why posters feel that the OP should have moral issues about enforcing the same contract.
 
This is the sole purpose of the non refundable 10% deposit after a signed binding contract for a house sale has been exchanged - it focusses the buyer to close the sale - if they don't for whatever reason they forfeit the deposit and (correct me if I am wrong) then become LIABLE for any future damages eg if you eventually sell at a much reduced market value later on

Put the shoe on the other foot - eg a few years ago when the stamp duty rules for FTBs were changed, if you (a seller) had tried to back out of a binding contract in order to get the "true" market value of your house (ie the sale price plus what a FTB had to then stump up in stamp duty) - you would have been sued into the ground by the buyer to force you to complete
 
The chances are that the buyer pulled out because property prices are falling rapidly and he realises that he can now buy simialar houses to yours cheaper than the price he had agreed to buy yours for. He would realise that the deposit is non refundable and he is mat be trying to take advantage of your good nature and good morals by asking for the deposit back.

If I was you I would forget about morals and think of it as a business transaction. The buyer has let you down so it is going to take you longer to sell your property, so it is now going to cost you much more money than if he had gone ahead with the deal. As property prices are now falling, you are likely to get much less for your property than the price that this buyer had agreed to pay. You will also have to be paying the interest on the bridging loan for longer than you had expected. Therefore think of the deposit as your compensation for having to accept a lower price for your house at some time in the future, for having to pay the interest on the bridging loan for a longer period and to cover the extra professional costs involved.
 
Hi All thanks for the posts some very interesting reading, our solicitor hasn't heard anything yet from them (this all only started last week so hopefull will hear something today) so still waiting to find out if it will close Wednesday (as agreed) or if they'll push the date back or pull out forfeiting their deposit. I'll keep you all posted.
 
Solicitor just phoned, the solicitor on the other side is off today we won't know anything until around 10.30 tomorrow. Our solicitor is very much of the opinion that it will go through as planned (maybe later in the week) as he doesn't believe they'll forfeit their deposit.
 
cannot understand how morals can enter this matter. the whole system of binding signed contracts would collapse if the purchaser thought he could pull out and get his deposit back. if there was some heart breaking genuine reason then when vendor gets back the deposit minus fee outlay etc he/she can always make a little gesture to the failed purchaser.
 
dewdrop said:
cannot understand how morals can enter this matter. the whole system of binding signed contracts would collapse if the purchaser thought he could pull out and get his deposit back. if there was some heart breaking genuine reason then when vendor gets back the deposit minus fee outlay etc he/she can always make a little gesture to the failed purchaser.
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Exactly - if morals came into it, the buyer wouldn't be going back on their word.
 
Latest update, our solicitor said there solicitor is known for being very slow with things, but turns out they hadn't sorted their mortgage approval and are working through it now and want to close in a week or two. So they were chancing their arms when they tried to back out. The sooner its all done and dusted the better!
 
Thats good news you must be relieved. There will be a provision in your contracts to charge interest if there is a delay. Your solicitor will probably threaten to charge interest(although in practice unless the delay is significant interest is not usually charged in the end).Threats however sometimes help to speed up the process..
 
Thanks Madangan, hopefully it won't come to that and we'll just get it sorted without charging them. I'll keep the thread posted!
 
I don't want to be a damp squib, but do they have a clause in the contract that the sale is conditional on getting mortgage approval - if they do then I hope for you that they do get mortgage approval, it seems very late for them to be doing this.
 
Hi Aileen2, I don't think this was in the contract as the solicitor had said if they backed out we would have the right to keep the deposit, hopefully it doesn't come to that!
 
closing due to take place this thursday (finally) so looks like the worry is almost over.
 
Good luck pc7 i would always worry if i heard a buyers mortgage wasnt sorted or if they were lax about getting it arranged because it shows a real lack of interest in the property they are intending to purchase and a distinct possiblilty they pull out...but it doesnt appear to be the way in this case
 
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