Ok, My husband and I put in an offer to purchase a home and the sellers accepted back in late May. Since then we have been waiting on hearing from the mortgage company. On July 2nd - before we ever were approved for the mortgage - my husband found out that the company he works for is going bankrupt. We tried to call the mortgage company to stop the process but couldn't get an answer because everyone was on vactaion.The mortgage was approved on the 3rd. Yesterday the mortgage company calls and says we are to close TODAY at 1:00pm. An earnest money deposit WAS NEVER COLLECTED. Now the sellers are threating to sue us. They are saying that they had someone lined up to rent the house but they didn't because we were supposed to buy it. They are threating to sue for 3 months worth of lost rent along with other damages. Is that possible? We are willing to give some earnest money but dont want to be sued for thousands. Please help! P.S. The house was never listed as a rental property.
2007-07-06 06:39:36 · 9 answers · asked by XoXoX 2 in Business & Finance ➔ Renting & Real Estate
Theres alot more too the story, I just didn't have room to write it.
We were orginally supposed to close on the house on Friday, June 29th and thats what is written in our purchase agreement. We WOULD have closed on that date but the sellers ALONG with mortgage lady, and our realtor (who is a dual agent) were on vacation until July 5th. THEY are the ones that changed the date, we wanted it sooner! The agent AND mortgage lady are STILL away and have some other reps from their offices handeling the closing. We didn't even know we were approved for the mortgage until the 5th. The closing date of the 6th was just sprung on us yesterday AFTER we said we didn't want to purchase. We found out on July 2nd that my husbands job went bankrupt. We had no clue prior. We immediately started calling the mortgage company on July 2 - through today to inform them because without employment we would not have been able to get approved for the mortgage. No one returned our calls till last night.
2007-07-06 07:14:52 · update #1
Giving them the three months "lost" rent without going to court may be your best option. You don't want to go to court over it. It is in your favor that the house was never listed as a rental, but you are breaking a contract and you are taking a chance at what the judge/jury will award them. Worst case, you are forced to go through with the sale, then have to deal with selling the house yourself. Best case, probably $5K-$10K, depending on the price of the house, or the three months rent they are seeking.
2007-07-06 06:47:10 · answer #1 · answered by Brian G 6 · 0⤊ 0⤋
The fact that the company is filing for bankruptcy doesn't mean your husband is losing his job, and unfortunately, that isn't a valid reason to get out of a sales contract.
You can call the bank, and explain it to them. If your husband can get a letter from his employer that the loss of his job will happen within the next 90 days and give that to the lender, that will give them a legitimate reason to deny you the loan, and a legal reason to get out of the contract...UNLESS you waived "contingent upon financing approval" on your original sales agreement (which is becoming more and more common in certain areas).
If you can't get any of these, then yes, they can force you to close or they can sue you for non-performance, and the Realtors can sue you for their commissions (though this is rarely done). You can also be liable for any fees incurred from the time they were to close to the time they can get it rented, plus any reasonable costs it takes.
Whether or not the earnest money changed hands is irrelevant, other than the fact that is another reason why you are in violation of the sales agreement....in their favor.
Earnest money does not have to change hands for the contract to be valid.
I wish you luck!
2007-07-06 07:12:05 · answer #2 · answered by Expert8675309 7 · 0⤊ 0⤋
They can sue you for breach of contract/failure to perform, and they most assuredly will win their case. It's not the seller's fault that your husband's job situation changed. When you sign a contract, you are expected to honor the terms of the contract.
If they are only suing you for a few months' worth of rent and some other damages, you are best off to pay up. Otherwise, you may well find yourself with attorney fees to go to court, and still lose, including THEIR attorney fees.
2007-07-06 07:36:07 · answer #3 · answered by acermill 7 · 0⤊ 0⤋
The sellers are completely within their rights to sue you, and will likely win if they can prove damages (which is actually harder than you think). The part of your story that sounds fishy is about how you could have stopped the proceedings much earlier "but everyone was on vacation". Cmon, for a whole month no one answered the phone?
2007-07-06 06:50:46 · answer #4 · answered by linkus86 7 · 0⤊ 0⤋
on the same time as actual property regulations selection from state to state, often speaking, the purchase-sell contract or purchase contract, is a criminal and binding settlement, between the supplier and the customer. in maximum situations, there'll be written into the physique of the record, what's stated as, client or supplier treatments, ought to one or the different default on a definite factor of the settlement. In maximum situations those "treatments" are in place to guard the two events to the contract, ought to the different fail to preform. in simple terms "changing Your techniques" on the subject of buying, might in deed placed you "breech" of the contract. There additionally ought to have been " contingencies" that should be met in simple terms before the close of the transaction. as an occasion: A contingency for financing at suitable words. If the customer can no longer discover suitable words, then the settlement situations can not be met and the contract may well be null and void. added information with regard to the content cloth of the "purchase contract" is mandatory to make certain no count in case you'll be held to blame for " breech of settlement", lose your earnest monies, or worse. The legalities of the settlement ought to have been defined to you intimately during which ever realtor became representing you whilst the contract became signed. i'm a qualified REALTOR interior the State of Montana, may well be happy to debate your concern extra advantageous, in spite of the undeniable fact that please observe:: i do no longer and could no longer prepare regulation the two interior the State of Montana or someplace else!
2016-10-20 01:48:12 · answer #5 · answered by ? 4 · 0⤊ 0⤋
yes the seller can sue for backing away. Now as to how much they can get is up to a court. You would much rather pay 2 months rent rather than the purchase cost.
2007-07-06 06:51:02 · answer #6 · answered by golferwhoworks 7 · 0⤊ 0⤋
They can legally sue you for breach of contract if you have signed one and made a deposit, but if you have not then they have no grounds to sue you. You can tell them that your credit situation has changed and that your bank will not loan you the money to purchase the house.
2007-07-06 06:48:27 · answer #7 · answered by pegasis 5 · 0⤊ 0⤋
Read your contract. Most contracts have boilerplate language that does not allow for suing. You lose earnest money-- and if there was none, presumably you lose nothing-- and that's it. THey can sue, but if the contract is signed, that it.
You can offer them a small settlement but make sure you get it signed that its FOR SETTLEMENT IN FULL, and that they "RELINQUISH ALL RIGHTS TO FURTHER MONEY".
2007-07-06 07:10:16 · answer #8 · answered by Anonymous · 0⤊ 1⤋
Yes, they can sue you because they had a loss due to your lack of performance... and they will probably COLLECT, too.
2007-07-06 06:47:32 · answer #9 · answered by Anonymous · 0⤊ 0⤋