can potential home buyer sue me if i back out?

Question

for short sale, the buyer waited 2 mo. to see my bank's decision. now that i decided not to sell the house to the buyer (i have my own reason...), realtor emailed me today that the buyer (or his firm) might sue me.

can this be possible? im planning to file bankruptcy tho...

i didn't sign ..not that i remember anything... i didnt take any advance that i am aware of, unless realtor hasnt told me anything to me...

Answer 1

If you have signed a written agreement with the buyer to sell your house to him and have taken some advance amount from the buyer you are accountable to him. He can not sue you for oral agreement.

Answer 2

Ellie,

First, if you file bankruptcy, then all litigation against you will be "stayed". This means that the Trustee assigned to the bankruptcy will control your assets and no one can sue against them unless they say so.

As to the the short sale, unless there is a contingency in your contract of sale that permits you to cancel the contract, then the Buyer may in fact sue for "specific performance". This is a law suit to force you to sell the property to them. However, if you are without assets to satisfy the balance of the mortgage and the current mortgage holder will not agree to short sale terms, then the Buyer will not have clear title and will not be able to close the loan that they take to buy from you .

Get a reputable Real Estate Lawyer to give you some advice as to how to "play the game" with the Buyers and force them into accepting the cancellation or paying more for the property to enable you to repay to the Mortgage Note.

Good luck.

Answer 3

Absolutely! About the only way you can pull out of a short sale without being sued is if the lender kills the deal. You don't have much say in it. Once you have accepted a signed offer that's pretty much the end of it as the seller. You must follow through with the sale or you risk being sued.

Twice in my life I've had sellers try to back out of a deal. The first time their attorney talked some sense into them pretty quickly. The second time I discovered that the seller had found a buyer willing to pay quite a bit more for the property. We sued and got a quick judgment. There was enough money involved that I did a double escrow and sold it to his other buyer and pocked the profit myself. Easiest $40k I ever made!