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Dealing with buyers who are financing

March 23, 2018
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Mr. Feichthaler,

I have had my house on the market for a few months, and I received an offer that I want to accept. However, it is contingent upon the buyer obtaining financing. I need to sell the property in the next 30 days to move up with my children in New York, so I am concerned about the timing.

-Susan D.

Dear Susan,

Most purchasers of homes in Cape Coral require financing to complete the purchase. When the contract is contingent on financing, it means that, if the buyers cannot obtain financing, that the deal is "off," and that the buyers can have their deposit back.

I advise my clients selling property of a few things when dealing with buyers who are financing. First, patience may be required. Often, through no fault of the buyer, there could be a delay in financing approval for a multitude of reasons. If you do have a buyer that needs to finance, you can consider doing a few things to protect yourself. Notably, you can require a non-refundable deposit. That way, if they fall through, you can help cover the costs of holding the property longer by retaining this deposit. By contract, you could require this be paid immediately upon signing the contract. Keep in mind, the buyers may object to potentially losing all of their deposit if their bank doesn't cooperate. However, it is your house, and if you choose not to sell because of the uncertainty a contract brings, that is your call.

Another option to consider is seller financing. If you own the house with no debt, and you like the idea of steady income, you could be the "bank" and loan the money to the buyers to purchase the home. It is important to have an attorney assist you with this loan to ensure documents are drafted properly, and that your mortgage on the property properly attaches. With the volatility of financial markets, many of my clients have found seller financing to be a relatively low-risk investment strategy.

As for the timing of your transaction, the bank will largely dictate whether it is ready to close in 30 days or not. You may want to consider only accepting cash transactions, or a large, non-refundable deposit for a bank financed transaction. Whatever you choose, I wish you the best in your sale.

Eric P. Feichthaler has lived in Cape Coral for 28 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continued his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest from 2011-2015, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 14 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.

 
 
 

 

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