when you have signed a contract and the closing documents are in and the earnest money has been deposited and you decide NOT to sell your house? You want to give the earnest money back and not close.
2006-12-18 02:19:18 · 11 answers · asked by Silky 1 in Business & Finance ➔ Renting & Real Estate
UPDATE: I found a loophole. The closing was supposed to be Friday at 1:00, even tho we didn't want to sell, no one knew -- yet. The deal was a long story but the bottom line is the buyer's mortgage co. wasn't ready by closing so that technically voided the contract and we're calling it. They weren't ready so we aren't selling. We called the Realtor and he said we were right. He drew up a Release of Earnest Money which also releases the Realtor, title co, broker and escrow agent from any liability we would seek to litigate. He actually got in a hurry to get us to sign it to release THEM, so the tables turned. So we got out on a technicality. PL, be sure you stay on the mortgage co to have their documents ready by closing.
2006-12-18 06:23:27 · update #1
UPDATE: I found a loophole. The closing was supposed to be Friday at 1:00, even tho we didn't want to sell, no one knew -- yet. The deal was a long story but the bottom line is the buyer's mortgage co. wasn't ready by closing so that technically voided the contract and we're calling it. They weren't ready so we aren't selling. We called the Realtor and he said we were right. He drew up a Release of Earnest Money which also releases the Realtor, title co, broker and escrow agent from any liability we would seek to litigate. He actually got in a hurry to get us to sign it to release THEM, so the tables turned. So we got out on a technicality. TC, be sure you stay on the mortgage co to have their documents ready by closing.
2006-12-18 06:23:56 · update #2
oops. I went in to put in TC's name and it put it in twice. sorry.
2006-12-18 06:27:48 · update #3
If all is in place I would tell my buyer client to sue for non-performance. The usual award around here is triple damages and triple commission to me and your listing agent. It had better be a REAL GOOD reason not to close. Changing your mind is not enough and will get you sued big time. Otherwise any contract would be worthless. How could anything be enforced at all?
2006-12-18 02:24:45 · answer #1 · answered by Anonymous · 1⤊ 1⤋
OUCH!
You signed a binding contract to sell your house, you need to complete the sale or risk the legal consequences of a potential lawsuit. Yes, you can lose much more than the security deposit, and what exactly that is will depend on the court decision. You may wish to talk to a real estate attorney in your area and see what has happened to others that were sued in your state under similar circumstances.
Many times though, the buyer will not go through with a lawsuit, but could. Also, the Realtor has a potential suit against you, if one was involved.
It may come down to how much do you really want to keep your home? Is it worth a potential legal wrangling and some potential major expenses? If a Realtor listed, they are due their commissions - they did their job. The buyer gets his earnest money back plus more. He probably has incurred some additional expenses, or lost other opportunities on alternate properties, etc.. while contracting in earnest on your home.
The earnest money is not meant as total compensation in case someone breaks the contract, unless your contract expressly states it as such.
2006-12-18 02:31:56 · answer #2 · answered by walkinandrockin 3 · 1⤊ 0⤋
If you've gone to exchange of contracts (UK) or have executed a Purchase & Sale Agreement (US) you are now obligated to follow through with the sale as long as all contingencies have been met. Once you're committed, the buyer can sue for Specific Performanc and force you to complete the sale. While that process takes its time in the courts, you'll be blocked form selling to anyone else. Don't shortcut the buyer because of the agent's shortcomings! The agent is "in the wings" on a sale and is not a material party to the actual sale of the property. They've performed a service that they'll be paid for, but the agreement is primarily between the buyer and the seller. And that said, I've never once bought or sold a home where there weren't some bumps along the road. Every deal had its unique impediments that were eventually overcome to everyone's satisfaction -- or at least to an even level of mutual dissatisfaction all around. Sometimes that's the best outcome that you can expect and at least it's a generally positive one. The short and best answer is this: Ask your solicitor or attorney! Part of what you're paying him or her for is their advice based upon their knowledge of the law. Use them!
2016-05-23 04:19:39 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I'm not a legal expert, but I am closing very soon, as the buyer, and if my seller's back out I would sue. You have to think of all the money the buyer's have probably spent besides the earnest money, that was the least I spent. We have paid for inspections, surveys, appraisals, my husband has had to take off from work a half dozen times, to work around the seller's schedule. We have paid deposits on new utilities, and we have given up the house we are living in now. I would sue for as much as I could get, if after we spent our life savings, they backed out unless it was a reason that was no fault of their own.
2006-12-18 04:07:02 · answer #4 · answered by TC 3 · 0⤊ 0⤋
As they all have said, you're screwed.
However, if you can get the buyers to back out, then you won't be at fault. For example, if an inspection showed some damage they wanted you to fix and you said you wouldn't, you might get out of the deal (IF your contract doesn't say you have to make repairs like that). It depends on your contract what you could do, but try things like pushing back the closing date or maybe a title search would cause problems.
2006-12-18 03:42:48 · answer #5 · answered by Phoenix, Wise Guru 7 · 0⤊ 1⤋
I'm not sure where you live, but I am in Canada and work in real estate. If you do not have a VERY good reason for not selling that satisfies the buyers you can be in big trouble (sued or forced to sell, for example.) You are reneging on a contract, remember.
2006-12-18 02:23:14 · answer #6 · answered by Zenchick 3 · 0⤊ 0⤋
In such a circumstance, you are in default of your sale contract. You will most likely be sued by the buyer for their monetary losses, as well as "mental anguish". You should never sign a contract until you are 100% certain you are happy with the terms therein.
2006-12-18 02:24:31 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Technically, they could take you to court and have a judge "order" that the contract be upheld. They'll be really mad, especially if they sold their existing house in anticipation of moving into yours, and suddenly have nowhere to live.
Your realtor might be a little pissed, too! He or she has probably spent a great deal of time and money marketing your property, and you're screwing them out of a commission.
2006-12-18 02:23:01 · answer #8 · answered by Anonymous · 1⤊ 0⤋
At that point you have breached your contract and the remedies available to the purchaser, through the courts are as follows.
The judge can order specific performance....force the completion of the contract.
The judge can order you to pay to the purchaser what is called "Liquidated damages".
In some instances the court will order both.
Better talk to your lawyer.
2006-12-18 02:29:52 · answer #9 · answered by Jack 6 · 1⤊ 0⤋
at that point you are legally bound and must sell. otherwise you risk being sued...
2006-12-18 03:39:12 · answer #10 · answered by Anonymous · 0⤊ 0⤋