Why do many Destin Florida real estate buyers “walk” in the middle of a short sale? As a buyer’s agent you’ve worked hard. You’ve called and emailed your buyers for months, maybe longer. You’ve shown them dozens of properties, perhaps even written an offer or two that didn’t work out. Finally, they get a contract accepted on a short sale. After two months of waiting, they “walk”– prior to the lender approval timeframes allowed in the contract. They DEFAULT on their contract– without penalty. Not only have you lost a sale, the buyers have tied up the sellers, the listing agent, the buyer’s agent and the lender. By tying up the lender, they clogged the short sale system for other buyers – who are willing to wait for the home they want.
I am prompted to write, because I just received a cancellation demand from a buyer for a waterfront condo in Destin Florida. The buyer’s agent emailed me the request for the $3000 deposit to be returned to the buyer. The contract had allowed 30 more days for bank approval, in this case Countrywide. Through frequent communication, the buyer’s agent knew written approval was imminent. When I asked why her buyer was trying to cancel, the agent said, “He is tired of waiting and doesn’t trust the short sale process.” I told the agent that the short sale approval had just been delivered to my email. and we actually had another 30 days to obtain approval per the contract. I told her he would probably “own the gulf-front condo within two to three weeks”. She said “he did not care, he had changed his mind, and it didn’t matter if the seller or I thought he was ‘loony’ or a ‘nut’“. And… he still wants his deposit back.
In this case, adequate dates were built into the contract. There was a $3000 deposit and the buyer had already completed his home inspection. But he simply “defaulted”. He accepts no contractual obligation because of his default- he feels he is entitled to his full deposit back. The buyers stance will not change even after wasting everyone’s time, and putting the sellers on the edge of foreclosure by tying up their condo.
What is the seller’s recourse? In Florida, title agents often hold earnest monies. They can only release the deposit when both buyer and seller agree. In this Destin Florida case, the buyer is requesting the release of escrow funds, but the seller will never agree. Thus, the money could forever be tied up without further proceedings. It is unfortunate that many buyers can “walk” without fear of recourse, as most Florida short sale sellers have no means to pursue them.