By Mike Bodeen · 20 February 2014
True Story (except for client names):
Realtor Mike listed the widow Jane’s home for sale and in relatively short order, found buyer (John and Mary) who absolutely fell head over heels in love with Jane’s home and proceeded to make an offer to buy it. After normal back and forth negotiations, a deal was struck, escrow was opened and proceeded normally. The house and termite inspections were completed and repairs were successfully negotiated. In just days, the moving company was scheduled to move Jane back to the Midwest to be with family. The closing was now less than two weeks away. Mike accompanied Jane to the escrow company to review and complete her closing documents.
With just a week away from the closing on Jane’s home the buyer’s broker calls Realtor Mike and says that regrettably the buyer may not be able to close the transaction as Buyer John was diagnosed with stage four cancer.
Talk about mixed emotions! On the one hand, you have a buyer (a real person) who has the fight of his life ahead of him. On the other hand, you have an elderly widow who just buried her own husband a little over a year ago and who did everything to the home that we recommended to get the home in “show shape!” and gets it sold, and now, maybe not.
Our prayers are with John and Mary AND widow Jane. Stay tuned on this one.
Does the Deal Die at Death?
Part Two
True Story (except for client names):
If you recall my last blog a few days ago, we left you with the question of what happens in a real estate transaction if the buyer dies?
Well, it didn’t take long to find our answer for this deal – unfortunately. Buyer John died yesterday having gone from cancer diagnosis to hospice to death in 7 days. On top of this, John’s wife Mary placed her brother in hospice in California.
First of all, there is no pat answer. The facts ultimately determine what will happen. In this case, surviving buyer Jane personally chose to relinquish the $2000 earnest money deposit to the seller because she felt bad for my seller not being able to close. Not only that, Mary personally went over to Jane’s house and apologized for not completing the deal! Can believe that? In a world seemingly dominated by greed and selfishness, there are some very sweet exceptions. Thank you Mary.
But the legal question remains…
The fact that a buyer dies does not by itself terminate a real estate contract. However, if the death caused the buyer to no longer qualify for a mortgage, the buyer could be entitled to a deposit refund. This assumes that the contingency for the buyer to obtain a new loan was in the contract, which is standard Arizona real estate language unless specifically removed by the parties.
What happens however, if the seller passes away? Is that different? Yes, it is, but you’ll have to once again stay tuned…