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Please give your advice - Buyer backed out of Sale of my TS !!

scottmindib

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Hello everyone,

I just wanted to get my friends on the TUG boards opinions on a situation that I am now encountering. Please help with any advice you may have.

I recently listed my TS for sale and a buyer told me that he wanted to open escrow with First American in Nevada. We opened escrow and sent in our online documents and he paid his deposit of $500 to the escrow account. This was about 4 weeks ago now and since then I have had several interested parties that I had to turn away (Now I have lost out on them). Not only that but he made me remove my ad from Redweek ( I wanted to keep it up until everything was finalized just in case he backed out). Now today he called the company and said that he wants to back out for financial reasons and does not want my TS unit. First American contacted me and stated that he wanted to back out and I asked what I was entitled to as far as the deposit. They said that on the contract it states that I am entitled to 3% of the purchase price in damages since he is backing out. I agreed to this but the buyer will not agree to giving me anything. We have to both sign and send back the agreement of damages or no monies will be released out of the escrow account. They said if he does not sign the cancellation agreement that his funds of $500 will never be released and he will be charged a penalty of $25 every month until the entire escrow account is used up. He would not agree to the damages and he says that he is going to hold me and the escrow company accountable for pain and suffering with a lawyer. What would you all do in my case? Should I just give in or should I stand my ground? Thanks for your opinions

Scott
 

london

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Release the Buyer

Release the buyer, and forget about the 3% damages.

Legal costs can become expensive.

Relist the week on Redweek and you should get a new buyer.

You should have kept the names and phone numbers of the prior interested parties. Redweek may still have those messages in your account.

There have been prior posts, similar to yours, and in the end the buyer was released.
 

gmarine

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I'm on the other side. You have a signed contract. You are entitled to the damages. I say keep the $$ and forget about his threats.
 

Latravel

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I agree. People forget that when they make threats of a lawsuit or getting a lawyer, they actually have to pay out of pocket for a lawyer! I can guarantee this guy does not want to pay for a lawyer (it's obvious since he's fighting paying 3%) and he is trying to intimidate you by making threats he cannot afford to follow through. Once you tell him to get a lawyer, he'll quickly realize it's much cheaper to pay the contract price instead of paying even 1 hour of attorney fees.

The most important thing is to continue to list your unit (if that's legal) and hopefully get a quick sale, which would make you feel better about the whole process. Good luck!
 

Talent312

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I'm on the other side. You have a signed contract. You are entitled to the damages. I say keep the $$ and forget about his threats.
That's easy to say, but its the escrow company that has the money, and those escrow accounts are more for the buyer's protection (to keep the seller from getting their grubby hands on it) than in the seller's interest. I say, if the seller wants the $$, he'll have to sue the bastard in small claims court, interplead the escrow company, and attach the escrow account to enforce the judgment.

Its all far more trouble than its worth. Perhaps the buyer will release the $500, once he understands that it won't be going anywhere, otherwise.
 

sernow

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I'm not clear as to whether he $500 deposit is the same amount as the 3% penalty. If the penalty is less than the $500, then don't agree to release the deposit. You can still proceed and relist the unit, while he will be out the difference plus $25/month. Since you don't have funds tied up and have a valid contract, I'd call his bluff.
 

T_R_Oglodyte

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You relist the unit and begin accepting offers. Under any theory of legal action you have an obligation to mitigate damages, which means going out and getting the best deal that you can.

In the meantime, you simply hold to your ground that you are entitled to 3% per the contract. Don't expect to get it, but don't release the money, either. If the seller never agrees to the release of money with you receiving what you are entitled to, eventually the funds in the escrow account are gone. If that's what the guy wants, that's what he can have.

If he gives and does decide to proceed with the deal before you have another seller on the line, you simply proceed with the sale as planned. Much as you might not want to deal with that guy in the future, if you're going to hold your ground you have to be ready to continue with the transaction if he decides that's what he wants. (OTOH - if you don't want anything to do with the guy, even if he should change his mind and decide to go through with the sale, then you need to authorize release of his money so that all contractual relationships between the two of you are ended.)

Otherwise you just proceed to resell the unit and worry as little as possible about what is going on with the escrow.

+++++

As far as I can tell, you have nothing to lose by simply waiting the guy out. If you release him, you don't get any money and you don't have to pay any money. If you don't release he plays what he thinks is "hardball", you mihgt possibly get some money, but you still don't have to pay any money. So I'm not sure why you wouldn't pick the option that gives you a chance of getting some money. (The exception, as noted above, is if you simply want to be rid of the guy.)

+++++

Based on your description, (and we all need to keep in mind that we do have only one side of the story) the lawsuit stuff is a bluff. He has no "pain and suffering". He has no legal ground to stand on. It's simply bluster to try to intimidate. I wouldn't worry about calling his bluff.

The only risk I can see there is if the guy is a lawyer and can prepare papers himself. Then without incurring any cost on his part (beyond his time) he can compel you to spend money on a lawyer.
 

scottmindib

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Steve and everyone,

I promise you there is no other info to this story other than he decided to walk away today for his own 'financial reasons'. He also told me today that he would be seeking damages for his hardship (that he said I created) and was going to make sure that he got them. He told the closing company a lie today in that he said I misrepresented the resort I was selling and referred to the name of another resort when talking to him via e-mail. This is by no means anywhere near the truth and all of the paperwork and every e-mail say my correct resort name and have my account number on every correspondence. I double checked every e-mail and the contract today for any type of errors and they all had 100% correct info on them. He is acting like I am taking advantage of him with this when he decided to back out. The only person he hurt in this was us after 4 weeks of waiting and then canceling all of a sudden. I don't understand people who always blame everyone else for their mistakes. Thanks for everyone's input.

Scott
 

Egret1986

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It's in the contract he signed.

Call his bluff, re-advertise your timeshare and let him deal with his $500 being tied up and the balance going down each month. You've got nothing to lose and he's not acting very nice, which gives you no incentive to let him off the hook, which you may have done if he had shown a little humility. Or be a better person than he's being, sign the paperwork, be done with him and move on. I had a similar situation with a sale that had gone to closing. The buyer backed out due to changing her mind and neither the buyer or the closing company felt the need to let me know. Only after I hadn't received the documents to sign and have notarized did I find out when I inquired about them. Sometimes common courtesy is non-existent.:rolleyes:
 

Egret1986

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That's the tactic the buyer used that backed out on me.

Steve and everyone,

I promise you there is no other info to this story other than he decided to walk away today for his own 'financial reasons'. He also told me today that he would be seeking damages for his hardship (that he said I created) and was going to make sure that he got them. He told the closing company a lie today in that he said I misrepresented the resort I was selling and referred to the name of another resort when talking to him via e-mail. This is by no means anywhere near the truth and all of the paperwork and every e-mail say my correct resort name and have my account number on every correspondence. I double checked every e-mail and the contract today for any type of errors and they all had 100% correct info on them. He is acting like I am taking advantage of him with this when he decided to back out. The only person he hurt in this was us after 4 weeks of waiting and then canceling all of a sudden. I don't understand people who always blame everyone else for their mistakes. Thanks for everyone's input.

Scott
She used the fact that there had been a one-time special assessment at the resort that I had paid in full and was a total non-issue. She said that since I didn't disclose the special assessment that I was being dishonest. She changed her mind was the reason, but used that excuse to get all her money back. Does anyone disclose in their sales listings past special assessments levied at a resort and paid in full? I could have understood if it was a current assessment and indicating that it had been paid, but not a past assessment. Some people don't want to take responsibility for their choices and/or mistakes and have no problem pushing it off on someone else.:doh:
 

sernow

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"Does anyone disclose in their sales listings past special assessments levied at a resort and paid in full?"

No. It's the buyers job to ask this type of information. I have seen people trying to sell weeks that have upcoming assessments that aren't disclosed, but this isn't the case here.

The buyer got cold feet and appears to be willing to make baseless accusations and threats of lawsuit to get his way because he has little else to go on. As long as you have a valid contract and haven't made any misrepresentations, you're fine calling his bluff because you won't have any money tied up.

Of course, you may want to agree to release the money even though you are in the right. It may be better to just move on.
 

dwsupt

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Hold your ground!

He's not getting a lawyer for $500- hold your ground. The cost to fight far exceeds what he will get out of it.
 

rsackett

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What would the 3% of the purchase price be? More or less of the $500?

Ray
 

scottmindib

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It would be less than $500 - actually about $81 total. At this point it is the fact that he is trying to push us around that I am most upset about. He initially said that he got laid off from work and could not buy the TS anymore. I thought to myself that was a legitimate reaosn but he also made me remove my listing for several weeks because he didn't feel comforatble with me having it up on redweek. I told him that I didn't feel comfortable taking it off until he finalized everything but reluctantlty I did it. I also missed out on 3 other potential buyers who e-mailed me while we were starting the closing. Now the one went and bought another unit and I am trying to get a hold of the other one. The third one asked if I would take a lot lower price than I was asking so i didn't pay attention to him. It is okay that he decided to back out but I ended up missing out on things as a result of him. Therefore, I felt that I was entitiled to some of the escrow funds which the company says that I am per the contract. It is not a large amount of money but I lost time and possible buyers due to him. He now e-mailed me last night saying that he is pursuing damages from the escrow company and from me for 'pain and suffering' that was caused to him by me and the escrow company. It is funny that he thinks that someone other than himslef caused all of this and is trying to blame me for not following through. I don't understand and now it is personal to me because he has thrown around this threat. I don't wand won't be bullied by anyone. I e-maield him yesterday and said in the e-mail that I will only agree to let the escrow funds be released if I am given what I am entitled to in the contract. Otherwise it will sit in escrow and the company will charge him a processing fee every month that the account stays open. To me now it is personal.

Scott
 

scottmindib

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A few years back my wife and I decided to buy a TS and put $500 earnest money down on a unit and told them we wanted it. The closing hadn't even started but we decided that we didn't want to lock into the financial responsibility of buying into an area that we weren't sure we would use. So I told the company that we decided not to buy and they said that he seller got to keep all $500 of the earnest money even though we hadn't started the process. I didn't like the answer they gave me but I REALIZED that I told them to start the process and I had agreed to buy it. I didn't say anything to them because I knew that I had made my own decision to put the money down on the TS. This situation is no different than what I went through a few years back. It was his decision to start this process and his decision to end it.
Scott
 

nazclk

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Deposit

Hold your ground, and tell him to go get a lawyer, he signed the contract and when a lawyer sees that, he will tell him to go away. Tell him $419 is better than nothing because the escrow company will eat up the money on a monthly basis. Better yet tell the escrow company that you will release $419 less any escrow fees, but to hold the $81 and let him fight about that.
 
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Tom52

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I had a similar situation several years ago. Buyer and I drafted and both parties signed a purchase agreement contract that contained a statement that buyer would place in escrow a non-refundable deposit of $500 and in exchange I would cease actively marketing the timeshare. I required this to insure I would not totally lose out if the buyer had second thoughts. Well the paperwork started, but the buyer would not return the documents to the closing company to finish the process, they would not even respond to communications from the closing company or me.

I asked the closing company, holding my escrow what I had to do to get my $500. They advised me to send a certified letter to the buyer and advise he had 14 days to complete the transaction or the $500 would be paid to the seller per the terms of the contact he signed. There was no action taken by the buyer so the $500 was paid to me.

I think if someone is serious about buying a timeshare they should be willing to commit to a non-refundable deposit that is guaranteed payable to the seller in the event they back out of the deal. That is, unless they can prove documented fraud on the part of the seller. The amount should be significant enough to compensate the seller for lost time and effort and possibly a lost sale to another interested party.
 

theo

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Hold your ground, and tell him to go get a lawyer, he signed the contract and when a lawyer sees that, he will tell him to go away. Tell him $419 is better than nothing because the escrow company will eat up the money on a monthly basis. Better yet tell the escrow company that you will release $419 less any escrow fees, but to hold the $81 and let him fight about that.
This sounds like good advice and a good plan to me....
I would encourage the OP to not engage in any protracted e-mail battle with the no-longer-buyer, however. Instead, state your view and position rationally, slam the door shut, and move on. Don't let ego, emotion and / or taking things personally cloud your judgement or waste your life energy.
 

T_R_Oglodyte

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Hold your ground, and tell him to go get a lawyer, he signed the contract and when a lawyer sees that, he will tell him to go away. Tell him $419 is better than nothing because the escrow company will eat up the money on a monthly basis. Better yet tell the escrow company that you will release $419 less any escrow fees, but to hold the $81 and let him fight about that.
I agree with the exception of releasing any of the money. The two of you agreed to termination provisions in the contract, specifically the payment of a termination fee to you if the seller backed out. No money should be returned until the buyer agrees to comply with those termination provisions.

By refunding the $419 you would be removing almost all incentive for the buyer to agree to release the remaining $81 to you. The escrow company will simply keep the account open for four months, until the balance remaining is consumed by the $25 fee, then close the account. The buyer who reneged will have $419 and you will have nothing.

That doesn't seem like a good outcome to me.

As soon as you start refunding money to the buyer you lose leverage, and the more money you refund the less leverage you have.
 
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Blondie

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I would not budge. If he loses the $500 and you get nothing then at least you get some satisfation. Of course the guy sounds like a total whack job and what is with the "He made me remove my ad from Redweek"?? I am trying to wrap my head around that, quite honestly. If that was any sort of condition of the sale that was a huge red flag and really, he "made" you? Perhaps it's time to push back.
 

capjak

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Why can't you sue him for pain and suffering?
 

scottmindib

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Thank you everyone for your support and advice. I don't take it lightly and I wil hold true to what my gut has been telling me- to hold firm in my stance against being bullied. Thank you so muh again!!

Scott
 

Talent312

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Why can't you sue him for pain and suffering?
That the buyer thinks he could be awarded damages for pain+suffering in a contracts case shows how ignorant and what an arse he is. In civil common law, which most jurisdictions use, pain+suffering damages can only be awarded in a torts case... i.e., an act of negligence (like a slip+fall) or an intentional bad act (like infliction of mental distress). It is not a measure of damages in a contracts-case.

Any lawyer worth his salt would tell the buyer that, as this matter sounds in contract, a claim for "pain & suffering" would not withstand a motion to dismiss. If the buyer is foolhardy enuff to file a lawsuit, the OP could counterclaim for damages resulting from the buyer's breach, and perhaps, add his own claim for intentional infliction of mental distress (to further aggravate the buyer).
 
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Andar

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What about small claims court.???
No Lawyers, small amount. Court can order relase of escrow funds.

We took a seller (house) to small claims. Our offer said house had to have all permits. They added large family room with/out permit. We didn't want it then. They refuse to release our earnest deposit. Took it is small claims.

The judge read contact. Asked if the family room was permitted. Sellers said no, judge ordered release of money. We didn't say a word, and the judge scolded the agent and seller for letting it even get to court. :clap:
 

glenn1000

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I think if someone is serious about buying a timeshare they should be willing to commit to a non-refundable deposit that is guaranteed payable to the seller in the event they back out of the deal. That is, unless they can prove documented fraud on the part of the seller. The amount should be significant enough to compensate the seller for lost time and effort and possibly a lost sale to another interested party.
I think that the above lesson is more important than whether you stand your ground or move on. If the original agreement called for a non-refundable deposit then you have a much stronger commitment to buy and at least some compensation for your trouble if it falls through.

Though it may be tempting to stand your ground, it may not be worth the headache of dealing with this person any more.
 
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