What if the buyer doesn't close?

As the market levels off, banks, buyers, appraisers and inspectors seem to have become more particular about problems that may arise prior to closing and in the past, people were more particular & more likely to find cures, solutions and alternatives. For instance, I am aware of a transaction that recently collapsed a few days prior to the closing because the bank "discovered" outstanding litigation with the condo association. There was a dispute with the association and their management company that resulted in a lawsuit which became part of the public record. When the bank received a copy of the condo associations answers to their standard, required questionnaire, the association correctly set forth the pending lawsuit. As a result, the bank refused to close the loan.
In the past market, the buyer would have rushed to find another bank who would do the transaction. But in this market, they decided not to go forward. The parties to the transaction were faced with the unpleasant position of deciding to sue each other or give back the deposit money and move on. In this case, the seller moved on by factoring time delays and attorney fees, the difference between the current contract and the new contract wouldn't be so great as to litigate the matter. A lesson to learn here, is first of all, retain an attorney with experience who will be able to react to different issues that can come up in today's changing market. And secondly, make sure to check out your condo associations records before you close. And get your condo documents to the bank as soon as possible so something like this isn't discovered so late in the process.