I left off yesterday by explaining I will be getting into detail about tricks buyers might use to avoid liability in the case they are unable to afford the purchase of your home.
One situation is when the buyer will make an offer in the name of a corporation as the buyer. The corporation will have no assets, so that if the buyer does default, there is no one for the seller to sue besides the corporation.
Another case that can happen is when a couple will put an offer in only one of the spouse’s name. The spouse whose name that the offer is made in will have no assets, and the couple’s other property will be in the name of the other spouse. Therefore the spouse who signed the offer can default and there is nothing for the seller to recover, except the deposit.
Another trick that a buyer might do is insert a clause into the agreement itself. The clause might be “The buyers may assign this agreement prior to closing, and the buyer shall have no further liability upon such assignment.”
If the buyers cannot close, they can then transfer the offer to a corporation with no assets and again the maximum liability is the deposit.
For sellers who suspect that a buyer might be attempting to limit their potential liability, you should insist on a higher deposit, closer to 10%.
This will be sufficient to discourage most buyers from walking away from the deal.
Other methods include you insisting that both spouses and partners sign the contract.
You should be wary of an offer from a corporation as the sole buyer.
There are more methods, however this will be discussed at a later date, what I have listed her are basic tactics you can go about to ensure you are not caught in this situation.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
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