QUESTION
If a purchase agreement for a home purchase has gone past the closing date and no addendum has been provided, how can I terminate the agreement?
Asked on Feb 13th, 2019 on Real Estate - Michigan
More details to this question:
A purchase agreement was signed for our home in September. There were no contingencies in the agreement. Closing was supposed to occur six weeks later. Closing didn't happen because the buyer needed to sell their foster care home first. We have signed several addendums since then but the last addendum expired in late January. Evidently, the person purchasing the foster care home has gone to a new lender and it will be at least three more months until our house might close. We have heard nothing more from the buyer and no new addendum has been presented. Our realtor is useless and we will be firing her yet this week. What do I need to do to terminate the purchase agreement or do I assume it is done since I've heard nothing? I just want to make sure I have all my ducks in a row.
1 ANSWER
Real Estate Law Attorney serving Holland, MI
at
Cunningham Dalman
Update Your Profile
Years ago I wrote a chapter for a continuing legal education book addressing breaches of real estate purchase and sales contracts. Based on the research I did for that chapter, because you have treated the transaction as still pending a few weeks after the missed deadline, you need to give the buyer a notice (best in a letter) setting a firm deadline for performance with a warning that no further delays will be tolerated. That deadline needs to be reasonable time in the future, given the length of time they have been in default without you declaring a default. Here I would suggest that be a couple weeks out from the date of the letter setting the deadline. Then if the buyer does not perform, you can terminate the closing. I have applied this approach a few times over the past few decades and not had a buyer challenge it. This is important because you do not want this nonperforming buyer to be in a position to challenge a purchase by someone else.
Answered on Feb 18th, 2019 at 1:32 PM