Defaulting Buyer and the Seller’s Options

BUSINESS LAW & ETHICS BFT ppt download

Question:

I am very suspicious that the Buyer won’t close. I am the Listing Agent and the Buyer’s Agent inquired about the possibility of a Mutual Release.

Answer:

This is a wonderful opportunity for the Seller. The Buyer is stuck. Make them close or let them breach the contract. The Seller gets the benefit of the Buyer’s guaranteed price, closing date etc.

The Seller should not under any circumstances sign a Mutual Release. That borders on negligence by the Listing Agent.

Declare the contract terminated when appropriate. Re-list and sell to someone else for less money. Get the difference from the Buyer. Hopefully, the deposit is large enough to cover this. If it’s not, then proof of additional damages would be required. Remember that up to the full amount of the deposit, no actual “proof” of damages is required. That issue was already covered off by calling the sum of money advanced as a “deposit”. So, as long as it’s not unreasonably high (over 20%), it will be forfeited.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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