The buyer of my house broke the contract. Could I force them to buy my house?

Question

After waiting for almost 60 days under contract and 7 days to closing, my buyer backed out! He put $5,000 down with the offer. I am all packed up and ready to move! Can I force them to buy my house? They claim they aren't able to afford it, BUT the mortgage company says they are approved. They just got anxious and decide not to buy. The contract is pretty standard and every demand is complied (price, allowance for repairs). What sucks is that I bought new furniture, new drapes, a refrigerator, scheduled utility switch, rented a storage facility (cause it was going to be a back-to-back closing on April 3rd) for the new house, and I am losing the opportunity to buy the new home I so wanted it!!! I am frustrated, disapointed and sad! Anyone can suggest anything?

Thank you all for the great answers, I wish I could pick each one of you as a best answer!

Answer 1

The general rule is that if the buyer defaults the seller keeps the downpayment ("earnest money") and must re-sell the house. You cannot force a prospective buyer to buy a house s/he doesn't want. One of the reasons large downpayments are so attractive to sellers is because the more money there is at stake, the less likely the prospective buyer is to default...and the less a seller will care if s/he does.

You may be able to bring an action for (monetary) damages caused by their failure to perform. For example, if you're unable to re-sell the house for the same amount of money and thereby suffer a loss, etc. You need to contact a lawyer in your state to discuss what your options are in that regard.

But as for those buyers: no, you can't force the sale.

Next time around, demand more "earnest money" before going to contract.

Answer 2

I think most of the answers are right, you probably get that $5,000 and that's it. I really feel bad for you, but as far as you saying that the mortgage company approved them? Please don't take that as a sign that they can afford to buy the house. My husband and I have been "approved" to buy a house for an amount that would be literally twice the house payment we can honestly afford. We have no idea where they come up with the numbers! I think these people probably got approved for X amount of dollars, found a house (unfortunately yours) that they liked, and realized that it was way more house than they actually can afford. I truly understand that this isn't neccesarily YOUR problem, but maybe you can walk away with the $5,000 knowing someone didn't make a foolish mistake that would have ended in them losing the house anyways.

Answer 3

First, was a Realtor helping you? If not, I would contact an Real Estate Attorney right away. Depending on what your contract states, if they can not afford (meaning are not qualified) to purchase, then the earnest monies goes back to buyer. If they can qualify, then you have a dispute over earnest monies and need an attorney if you aren't represented by an Realtor. On the other hand, if you're purchasing something and you just used your credit cards to buy, you may have impacted your ability to purchase as well.

I'm sorry this has happened to you. But I strongly urge you to hire an attorney if you are not represented by a Realtor. If you are represented, then go directly to the Broker for more answers if the agent isn't helpful. Good Luck!

Answer 4

Basically I agree with what everyone else is saying. Consult your real estate attorney for specifics. Your contract almost certainly includes rights and responsibilities of both the buyer and seller. The buyer agrees to buy from you AND you agree to sell to him. There is not much you can do is the seller refuses to close. You can try to go to court but this will take time, during which you cannot sell to anyone else. It is probably just easier to break the contract and re-list the home.

Answer 5

You will be able to keep the $5000.

You could try to enforce the contract, but that could drag out for months, would be expensive, and you're not guaranteed to win.

If your contract includes and provisions for "specific performance" then you would have a decent case and should contact your lawyer immediately.

Most likely, that is excluded, or there is a provision for "liquidated damages" which means you get to keep the earnest money, and are otherwise SOL.

Answer 6

You probably cannot force them to buy it. It partially depends on why they backed out. Most contracts provide that not being able to get financing is a valid reason to terminate the contract.

Your remedies are to keep the honest money ($5000). If your damages (costs) are more than that then you can probably go to court for additional damages.

good luck

Answer 7

First off, you can keep the deposit of $5,000 as they defaulted and so it goes to you. Secondly,consider re-mortgaging your old house to get sufficient funds to close your new one (assuming it has its own arranged mortgage) and rent the place out so you can have some income coming in until it can be re-sold.

Answer 8

Dude, I hate to say it but you're fubared. The saving grace to the situation is that you get to keep the $5,000. If I were you'd I'd just relist the thing and cross your fingers, because the truth is that you can't force them to buy it.

-J.

Answer 9

You should get the deposit. Let them walk away- let karma take care of them. Take the money and relist the property at a price to move it quickly, or look at some other ways you might be able to get out from under it (renter? lease option to purchase? owner carry it? ).

Answer 10

I represent a collection agency and I am curious to find out what the contract states. Have they requested their deposit back or is it non refundable?