What is the NJ Law that states when a buyer must have the means to pay his/her offered amount? ie. Can someone make an offer without the means to pay?

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What is the NJ Law that states when a buyer must have the means to pay his/her offered amount? ie. Can someone make an offer without the means to pay?

We are dealing with a situation of fraud where the other ‘buyer’ did not have the means or intent of paying thier offer price. The other details I will leave out but a judge is ruling that the entire situation is in fact fraud but the other “buyer”may still be able to get the house if they can come up with thier offered amount. My thing is that they did not have the intent or means to buy the house for thier offered amount at the time of the offer so is thier offer null and void?

Asked on May 13, 2009 under Real Estate Law, New Jersey

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Those "other details" you've left out might make a big difference here.

The usual form of real estate contract in New Jersey includes a paragraph where the buyer represents having the financial ability to complete the deal, subject to any mortgage contingency that might be included.  The fact that that wasn't true at the time might well be what the judge is, or will be, as the reason for his finding of fraud.

If there is a judge ruling on this, there's a pending lawsuit, and whether or not the contract that was formed from the other buyer's offer is valid is probably one of the main issues in the lawsuit.  And they may be trying to pull the money together to close the deal, so that they don't have to pay damages for breach of contract.  Because they can't use their own fraud to say that their own offer couldn't be accepted.

I gather from your question that you want to buy the property. All you can do, for now, is wait and see what happens.  Or -- you can keep looking.  If you have the ability to buy a house, you can probably pick and choose from a lot of different properties, and maybe you can find one you like better, for the price, while this lawsuit goes on.  And if the other buyer can close, you might have to do that anyway, so why not go back to house-hunting now?


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