What if your end-buyer doesn’t come to the closing?

Is all lost if your buyer doesn’t come to the closing?

To see this video, click on the picture above or you can read the transcript below

• You have only a couple of options to rectify the situation.

• Number one – get his earnest money deposit from the closing agent.

• Number two – get an extension from your seller and try to quickly resell the property.

• Even though you put on your contract that the end-buyer’s earnest money deposit was non-refundable under any circumstances, it doesn’t mean you’ll get his earnest money deposit at all

• Paying out the earnest money deposit to you is at the whims of the closing agent or closing attorney.

• If he pays you as the contract says, he runs the risk of being sued by the end-buyer, and if he doesn’t pay you the earnest money deposit, he runs the risk of you suing him.

• In most cases, he protects himself first and just holds the earnest money deposit until there is either an agreement between you and the end buyer or he receives a court order.

• The closing agent should provide you with a cancellation of contract and an earnest money deposit disbursement agreement to be signed by you and the end buyer.

• If the end-buyer won’t sign, you are deadlocked as to how to get the earnest money deposit you’re entitled.• Most Realtor® contracts first call for mediation and then civil court action.

• Typically in mediation, the mediator strives to have a settlement where each party gets one-half of the earnest money deposit.

• The better option is to find another buyer as soon as possible and move to close the transaction with a new buyer.

• One way to prepare for this consequence of the end-buyer’s default is to keep selling your wholesale deal and take backup contracts so you can build your buyers list at the same time.

• The only wrinkle that might happen is the original end-buyer may not sign a Cancellation of Contract and your closing agent will not do your second closing, with the new end buyer, without it.

• To get the former end-buyer to sign the cancellation, you may have to give up part or all of his earnest money deposit.

• Your option to solve this problem is to immediately transfer the closings (A-B and B-C) to another closing agent who is unaware the previous failed closing.

• Whatever the former end-buyer says as to why he isn’t closing, more than 40% of the time it’s because of his hard money lender not providing the funds for the closing as promised.

If you have any additional questions, contact me directly at DaveDinkelQuestions@gmail.com.

If you need hard money instead of transactional funding, contact me for referrals to private hard money lenders.

Be sure to check out BestTransactionalFunding.com for all your same-day double closing needs, including a list of Investor-Friendly Closing Agents in various states.

We have more five-star Google ratings than all the other transactional funders combined.

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