Buyer not loan approved after all

As the executor of my parent's estate I recently sold the house through an estate agent. We accepted an offer to a buyer who was loan approved and ready to go. All the surveys etc have been done and the closing date set for the end of this month. The buyer's solicitor seemed to be stalling and when pushed by our solicitor it became apparent that the buyer has NOT got loan approval yet. I am furious to say the least, I gave him until next Wednesday to get things sorted or the house goes back on the market. My question is - What happens to his deposit, do we get to keep it ? I

What sort of deposit was it? When we sold my parents house (and my uncles a year later) we got a booking deposit of €3000. That was refundable if the sale did not complete. At a later stage we got a non-refundable 10% deposit. Your solicitor will be able to advise you.

Thanks Emeralds, afaik it was a €5000 booking deposit. I will check with my solicitor, although I am still hoping he can secure funding. I am dreading telling the family that the sale has fallen through, especially since most of them have spent their share already

The booking deposit is refundable I am nearly sure. I feel your pain - we were like hens on hot bricks waiting for the sales to close. Plus you have the emotional feelings about your parents home leaving the family....

ledger said:

. I am dreading telling the family that the sale has fallen through, especially since most of them have spent their share already

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Well they are very silly people if they've spent money they don't already have. How is it your fault any of this in any case? Being an executor is a non paying job that gives you grief and you should not need to have to explain anything to your family. Instead they should be grateful to you for taking it on.

You don't seem to have even been at contract stage. Who told you they were loan approved? Booking deposits are fully refundable. If they are the sole buyer you've had in a long time, in this market, I wouldn't be giving them negative deadlines.

Thanks Emeralds, it's been an emotional roller coaster alright.
Bronte, I've calmed down a bit since I posted. The estate agent told us when he put the offer to us that the buyer had secured funding and was anxious for a quick sale. Contracts had been sent to the buyer's solicitor with all the relevant documents. Closing date was agreed. It wasn't until my solicitor queried the delay that we found out. I don't think that the bank have said no, it appears he is still haggling with them. I know the family may have been a bit premature but I can't blame them really. It's been a very long road and I suppose they got carried away. As regards being an executor it is, as you state a job that brings nothing but grief. I would advise anyone who is asked to say thanks but no thanks.

To clarify a few points in this thread: -

• If booking deposit only has been paid and contracts have not been exchanged, purchase (or vendor) can pull out at any time for any reason and purchaser will get their booking deposit back. It sounds like this is the stage you're at and any "closing date" that has been agreed is only an informal agreement.
• When contracts are exchanged and a contract deposit paid (typically 10% of purchase price) only then can you start to relax and believe that the house has been sold. At contract signing, a closing date will then be formally agreed.
• Then, if the formally agreed closing date is missed, your solicitor can start a process to try to force the purchaser to close. I'm not a solicitor but from memory I think your solicitor starts this process by serving a 28-day notice on the purchaser and then takes it from there. That said, if the purchaser simply cannot close then you cannot make the impossible possible, regardless of the rights or wrongs of the situation.

My understanding is that the third point above is a lengthy process that can take months, so even if contracts have been exchanged and a closing date missed, it's not an automatic process that you simply walk away and keep the contract deposit.

Your solicitor should be able to talk you through all of this.

Thank you LD, that all makes perfect sense and ties in exactly with events so far. Here's hoping finance can be secured and we can move towards that contract deposit stage