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Posted: 5/23/2005 11:30:20 AM EDT
I'm in the process of selling my home and buying a custom built lake home. We've done everything except the closing, (Jun 1st) earnest money, (grace period is expired) inspections, financing, repairs and re-inspection, bought insurance, movers have an appointment, the whole 9 yards. The plan was to move on the day of closing into a brand new home we have had built. The loan for the new home was predicated on the 90K equity we would gain from the sale of the OLD home. Contracts have already been finalized and signed.
Now, the buyer of the old home says he's changed his mind. He's tied up two Real Estate agencies, a builder, and over a quarter million worth of property. I have yet to hear back from the Real Estate guys on this, they went into a huddle this morning. I really detest the "sue" word, but is there another option at this point? 
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Posted: 5/23/2005 11:35:46 AM EDT
[#1]
I had to sue the prior owner of my home in order to make him close.
He had sellers remorse...probably becasue he under-priced this house. We had a clause in the agreement that said the sale was contingent upon him closing on the new house that he was moving into, and he actually defaulted on that contract (and walked from a 10k deposit, which the home builder was happy to take) to try and prevent our deal from closing. |
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Posted: 5/23/2005 11:43:28 AM EDT
[#2]
You have a binding contract, but ussually in these contracts there are outs, financing ect. However if there is no out for this person you will at the minimum get to keep the escrow money from him and go ahead and contact an attorney. These are situations when lawsuits are necessary, you sign a contract to do something, than do it and if you don't, expect legal ramifications.
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Posted: 5/23/2005 11:46:28 AM EDT
[#3]
He's gonna walk away scott free. If you don't have on writing that he's bailing because he changed his mind, you're screwed. He'll come up with some excuse in the agreement or say it's a finance issue.
I had tow offers back out on me because of "financing issues" that had already been pre-approved. They just wanted to skate, and the monetary amounts exceeded yours by a fair margin. Nothing I could do but swallow the loss... |
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Posted: 5/23/2005 12:13:33 PM EDT
[#4]
First & foremost, review the contract you & the purchaser signed with your attorney. Hopefully you are using a lawyer that specializes in real estate (not some friend that does trusts, wills, trial work, etc. & agreed to give you a "good deal" to handle the paperwork) as he/she will know the ins and outs of contracts in your area.
Don't talk to the purchaser or their agent (if they're using one). Refer everything to your closing attorney & let the lawyers for you & the other side talk this out. Don't be surprised if all you "win" is the earnest money. I hope this turns out for you ok. p.s.--I sold real estate in TN & this is how situations such as this were handled. Your results, options & procedures may vary depending on various laws from state-to-state, etc. |
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Posted: 5/23/2005 12:28:49 PM EDT
[#5]
If the Earnest Money Contract that was used for the 'resale' of your home to this prospective buyer is TREC Form 20-6 (One to Four Family Residential Contract - Resale), look at Paragraphs 15, 16, and 17, to inform you of your legal rights should the BUYER default in his obligations under the contract.
Under Paragraph 15, you may either sue for specific performance of the contract, which, quite frankly, will tie up your property for a very long time, or simply keep the Buyer's earnest money as liquidated damages. Under Paragraph 16, you may have agreed to arbitrate the dispute, which will also slow the resale of your property and your acquisition of your new lake home! The good news is that, under Paragraph 17, IF you do decide to sue for specific performance (going through with the purchase) you will be entitled to reasonable attorney's fees, should you prevail! Ordinarily, I would advise you to take the forfeited earnest money and see about getting your present home resold, as soon as possible! Sad and unfortunate, but likely the easiest way to resolve your problem. Eric The(GrainOfSalt)Hun 
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