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[{"id": "hnihy35", "text": "Absolutely common. I had it happen on a retail building only to have them back out 6 months down the road after 2 extensions the day before closing. Toughest deposit I've ever had to give back.\n\nI'll add they're just banking on you to cave. Hoping that you're under dire enough conditions that you'll accept their terms.", "replies": [{"id": "hniifq3", "text": "That\u2019s what I figured. The bad news for them is we don\u2019t even have to sell if we don\u2019t want.", "replies": [{"id": "hnij671", "text": "Tell them it\u2019s $100k more now. Use the phrase \u201cYesterday\u2019s price is not today\u2019s price\u201d", "replies": [{"id": "hnitk18", "text": "Thank you, I will remember that.", "replies": [{"id": "hnj3p7h", "text": "Send them this https://www.reddit.com/r/amcstock/comments/pov3co/yesterdays_price_is_not_todays_price/?utm_source=share&amp;utm_medium=ios_app&amp;utm_name=iossmf", "replies": [], "depth": 5}, {"id": "hnldp51", "text": "One of my favorite lines is from \u201cDraft Day\u201d, \u201cWe live in a different world than we did 30 seconds ago\u201d. I have used it multiple times in situations like this. It always feels good to make them pay the asshole tax.", "replies": [], "depth": 5}], "depth": 4}, {"id": "hs4vioh", "text": "Lmao \u201cbut I\u2019ll let you pay me tomorrow for the building today\u201d", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "hniwdld", "text": "No way EM deposit should be refundable after 2 extensions and the day before close. We're you repping buyer or seller?", "replies": [{"id": "hniyh18", "text": "Repping seller, huge deal too 2M+. Unfortunately they were still up protected to get their EMD back. What started as 20k deposit &amp; 90 days of due diligence ended up being 180 with an extension and refundable 40k total in escrow. Come to closing time they ask for another extension. We went by the contract THEIR lawyer wrote which required 50k more non refundable deposit if they were to extend. They wanted us to waive that non refundable money, we refused and they walked.", "replies": [{"id": "hnjz8i8", "text": "Only 20K deposit on a $2mm+ property? 90 days DD? \n\nKinda sounds bizarre. When was this and what region? Did the property have a hard time selling?", "replies": [{"id": "hnl17lq", "text": "Accurate guess. 3 story 100 year old building ex-department store in a gentrifying area. Top 2 floors vacant for 60 years packed with more asbestos than I\u2019ve ever seen. Beginning of the pandemic, we were so thrilled to get a great offer on the building we overlooked requiring a larger deposit to go hard earlier. It was a local developer who I had done deals with before &amp; had a good reputation. I can only assume they put the building under contract, shopped around for a tenant and bailed when they couldn\u2019t find one.", "replies": [{"id": "hnmxet7", "text": "Oof yea that makes sense now. The \u201chistoric\u201d buildings are always the most fun to sell\u2026", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "hnj0eso", "text": "Why did you have to give the deposit back? Isn\u2019t that the purpose of the deposit?", "replies": [{"id": "hnj1zvl", "text": "Their EMD didn\u2019t go hard up until a certain point. Before that they were still in their bounds to terminate the agreement &amp; have their deposit refunded as opposed to being in violation of the offer &amp; losing their EMD. It was an all cash offer with zero environmental or clean up remediation contingencies &amp; we were pretty sure they were going to close so we thought we fucking had the cat in the bag. I started picking out a Porsche, I was mad bummed when it fell through :(", "replies": [{"id": "hnk3y5i", "text": "6 months is a very long time to allow a commercial real estate contract with no loss of EMD. \nDid your broker even ask. for proof of funds to verify the cash offer?\nThe long due diligence period sounds like the buyer was either trying to wholesale the deal or failed to syndicate the deal.", "replies": [{"id": "hnl1hd7", "text": "Yep, they were a local developer I had done deals with before &amp; had ample funds for the project. I can only assume they put the building under contract, shopped around for a tenant and backed out when they couldn\u2019t find one. The nature of the building is far too complex to wholesale.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hnijqqt", "text": "Put a clause in your contracts that has a certain amount of money go hard if they use an extension. Make the amount big enough so  you are satisfied and they feel obligated.", "replies": [], "depth": 1}, {"id": "hnimwkp", "text": "Why are they keeping earnest money? You should have that money as part of entering into the contract. I don't understand.", "replies": [{"id": "hnipcr8", "text": "unfortunately, for the unhappy seller, it doesn't work that way.", "replies": [], "depth": 2}, {"id": "hnj7d1c", "text": "It depends on the purchase agreement. Have you\u2026 ever read one? That\u2019s one of the terms you do NOT skim over.", "replies": [{"id": "hnlh0mo", "text": "Ever read one? Hell, I've written one.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hnip93x", "text": "Many purchase agreements have a specific number of days for the buyer to complete their due diligence (property inspections, appraisal, termite, loan, etc.) and if they cancel within that time period, they receive their EMD back. This is one reason, in this type of market that many agents try to narrow down that time period (in California, the PSA defaults to 17 days for appraisal and 21 days for the loan). We are closing a deal right now where the buyer offered to close the deal in 7 days. We gave them 5 days until the deposit of $100k (although you can only keep up to 3% for liquidated damages in CA on residential properties) would go nonrefundable. If they close, the money goes towards their purchase but if they cancel, they lose the deposit.", "replies": [], "depth": 1}, {"id": "hniqjmi", "text": "I think you learned an important lesson about not having a good enough contract.", "replies": [{"id": "hnj52zn", "text": "At least if I\u2019m forced to learn a lesson i should be grateful it was a free one.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hnis05n", "text": "You need a better broker (realtor) or a better lawyer. Either one should have been able to see this coming from a mile away and should have negotiated for it. Bait and switch doesn't happen if you have solid enough contract forms.", "replies": [{"id": "hnjaka8", "text": "Seriously, better everything. I thought it was going to a BS lis pendens extortion racket. Anything you sign as Seller has to be vetted!", "replies": [], "depth": 2}, {"id": "hnjdam8", "text": "We just had a similar situation. Had three offers and seller wanted to close before the end of the year (this was three weeks ago). All buyers said they could close before the end of the year. All similar price. One really wanted the deal. We asked for $100k earnest money hard day 1. Only contingency was title issues. Had they tried to chicken shit out of the hard money we'd have gone with a different buyer.\n\nEdit to add that if it were me I'd have found out why they needed until March. May have been something to work with where you both could have benefitted.", "replies": [{"id": "hnnt93u", "text": "They said their accountant said not until March, I\u2019m guessing they didn\u2019t have the money until then?", "replies": [{"id": "hnrc387", "text": "Most likely for tax reasons. You could have done a short lease to get some money while they put together the funds.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hnit9rk", "text": "I had a residential deal go this way back in 1988 or so.  I was just starting out in rental properties, had 2 condos if I recall.  I'd just bought my first commercial piece a year or so earlier and I realized that in about 4 months, I'd need the equity in one of the condos to pay for some of the tenant improvement work being done on the commercial piece.\n\nProblem was, the one I had the right amount of equity in had a tenant that was a great tenant, but didn't have the wherewithal to find another place very easily (young girl trying to build her credit....I'd kind of taken her under my wing).\n\nI told her I was going to sell the place in the very near future and had her start looking for a new place, knowing it would take her a while to find and I told the Realtor (my best friends Dad....you can't make this shit up) that I couldn't close any deal for *\"120 days from today*\", and I explained in detail exactly why (because I wasn't going to toss this girl out in to the street).\n\nHe comes back with a full price offer in about 3 weeks, hands me a purchase and sale agreement with a closing date about 30 days out and I hand it back to him saying *\"we can't close for another 100 days, that was made clear...I gave my word to my tenant\"*.\n\nHe said \"*you mean to tell me, your word to your tenant is more important than a full price, signed deal?\"*\n\nBarely missing a breath I informed him his listing services were no longer needed, or valid.", "replies": [{"id": "hnjbjcv", "text": "You were the good guy in that scenario. I hope she realizes how kind you were being. I figure I learned a lesson and it didn\u2019t cost me anything so I\u2019m good. Just wondered how common it was, apparently it\u2019s very common.", "replies": [{"id": "hnkir4f", "text": "She did.  She became a lifelong friend in the end and, the realtor died broke, struggling.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hniuf0x", "text": "How can I retrade the deal in escrow if you don\u2019t give me enough time to tie it up in escrow? Rude.", "replies": [{"id": "hnj4isb", "text": "We actually do think this was their plan the whole time.", "replies": [{"id": "hnjf98h", "text": "It almost certainly was. If you want to give them the benefit of the doubt they were trying but couldn't do it. Sounds a lot like they needed to raise the equity and couldn't pull it off fast enough. Proof of funds would have helped it that was the case. If it was land then March would have been a reasonable ask. If they try to blame their lender they need a new lender.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hnixwhv", "text": "I know it's not the same with commercial and residential, but I had a commercial property that had value in the potential to make money, but in a very low-income area. Tricky, and it meant waiting as opposed to dropping the price. \n\nFor several years, we were under contract with two or three different people who put us under contract for 90 days, and then kept extending it 30-60 days at a time because they wanted someone to lease the land from them, but didn't have a business to open up there. It ended up costing them nothing to keep the land off the market for 2 years while we paid $30k in taxes on it before we gave them the boot. Our agent said it was better to have a bird in hand, but I didn't really see it that way, and he had us turning down another offer for this one. They walked away because the agent had agreed to a 'If we find any reason not to buy it, we walk' clause.\n\nIt was an expensive lesson, but we learned.\n\nWhen they want an extended closing period, make sure they can't get their money back past 30 days. If they balk, they were not serious.", "replies": [{"id": "hnj0hey", "text": "I\u2019m very glad ours didn\u2019t turn out like yours, that\u2019s terrible. It has Prime location so we are not worried about it not selling.  And we aren\u2019t desperate for the money, not rich, just debt free. Our realtor is more upset about it than we are. It will be a sad day for us the day it sells.", "replies": [{"id": "hnj1ipd", "text": "It's their loss. Good luck.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hniyfy6", "text": "This isn\u2019t a \u201cbait and switch\u201d it\u2019s a non event.", "replies": [], "depth": 1}, {"id": "hnj2s3j", "text": "It\u2019s not bait and switch. It\u2019s a shitty buyer doing shitty buyer things. Pretty common in the middle market, mom &amp; pop arena\u2026less common in the institutional space.", "replies": [], "depth": 1}, {"id": "hnj4pdz", "text": "This is why you make your inspection period 5 days. then you don't lose but a week on a tirekicker.\n\nBut they are well within their rights to back out for any reason. Doesn't mean they did anything wrong.", "replies": [], "depth": 1}, {"id": "hnjo65r", "text": "Depending on how the purchase agreement and extensions were written you may have been entitled to the earnest money deposit.  \nIn my contracts the earnest money is tied to the feasibility period and not specifically the closing date.  \nIf the feasibility elapses and isn\u2019t extended with the closing date then there could be a chance the earnest money was forfeit.", "replies": [], "depth": 1}, {"id": "hnjret1", "text": "You gave free look they took free look", "replies": [], "depth": 1}, {"id": "hnk1oln", "text": "In a high demand scenario, call for offers and interview the potential buyers. Ask the obvious questions: How will you finance? How will you source the equity? Has the decider visited the property etc. etc.  If they won't say or if your research of the buyer turns up some negative information, don't sign the contract.  That is not to say every answer will be 100% truthful, but over time you will improve your ability to spot a \"Real\" buyer.\n\nIf you are picky, you will miss some potentially good buyers, but you will be less likely to tie up your property with somebody who cannot perform.", "replies": [], "depth": 1}, {"id": "hnko530", "text": "Does it say exactly when you can keep their earnest money? I would keep it as long as legally allowed. Just to add some friction on them. :)", "replies": [], "depth": 1}, {"id": "hnmfn06", "text": "Make up your mind and have terms known before writing the contract. Best is take it off the market until the start of 2022.", "replies": [], "depth": 1}]