Real estate: can our seller back out of the contract since we were late in satisfying a Notice to Perform?
October 17, 2011 9:53 PM Subscribe
We're in escrow on a house in southern CA, and were recently the unhappy recipients of a Notice to Buyer to Perform
(or more accurately our realtor was, by email.) We got the contingencies lifted but did not quite do so within the 48 hour period dictated by the form, and now the seller wants out. Can they now back out legally?
Because our lender is apparently very picky about comps and kept sending the appraisal back for revision, we ended up exceeding the time allotted to lift our contingencies. The seller's agent emailed our agent a Notice to Buyer to Perform with a 48 hour window after business hours on Thursday evening. They then relented under his protestations that they wouldn't be able to cancel escrow over the weekend anyway, and agreed to give us until "Monday morning." After spending all day on the phone with underwriting (with periodic calls to the seller's agent to let them know he was still working on it,) our mortgage broker eventually got the bank to accept the last revision of the appraisal and we lifted all contingencies around 3 PM Monday. Escrow was never cancelled, but we did not successfully meet the 48 hour stipulation of the Notice to Perform.
Is the seller now free to back out of the contract, or did they miss their chance when we lifted the contingencies? Their agent has told our agent that it is their intention to walk away from the deal, since they have a cash offer as backup and feel it would be "less messy" to go with that instead of continuing with our FHA loan and all the repairs they have agreed to make under our current contract.
We plan to consult a lawyer, but this all just went down today and I'm eager to hear other people's experiences and advice. Based on what I've seen from this seller so far, they seem willing to employ some sketchy tactics if it will e.g. save them money on homeowner's insurance, and also failed to disclose a sewer line issue that would've been nearly impossible for them not to know about, so if this looks like an underhanded negotiating strategy to you I'd like to hear about that too (it seems strange to me that they wouldn't cancel escrow immediately after the notice expired if they really wanted out.)
Our realtor has mentioned arbitration as an option and feels that our chances would be fairly good, but I'm not sure how experienced he really is in this situation. Thanks for any advice you can provide, it's been a harrowing few days and I could really use some informed guidance. Again, we do plan to consult a lawyer.