I Am The Seller Who Signed The Contract And NEED To Back Out - Please Read Before Passing Judgement
I live in Ohio. We found a townhome for our family and started the process of selling our house - bidding on the townhome. We showed our house the first day and had an offer for our asking price - YEA!!!. We went shopping with our kids for new furniture to prepare for this "upgrade" in our lives. We began negotiations with the party to buy our house and worked through all details and agreed to sell. We signed the contract to sell our house at our house @ 10:30 PM on a Sunday Night. My wife calls to tell her father , who lives by himself in the UP of Mich, the GOOD news - and he tells her his health is "failing" - without going into much detail and asks if we have a spare room = he wants to sell his place and live with us. We stay up all night discussing options. The outcome of our thoughts -We definetly will be taking him in and the added expense makes difficult at best to continue our offer or sale of our house. We contact our realator the next morning @ 9AM and he stops the offer on the townhome , but, the contract to sell our house was "presented". Now the realator who sold our house is basically saying sorry - see you at closing. We sent a letter of mutaual recission - no answer..... I want to settle this before the buyer spends any more tme and money but it goes on?????? What to do???
You have a couple of choices here:
1) honor your word and your contract and go forward with the transaction as you agreed to do.
2) Weasle.
Regardless of the morality of weasleing I assume you've decided to do that or you wouldn't be posting the question. So now the question is simple, Given that you are going to Weasle how can you do it most effectively?
Did your contract to sell include an attny's review period? Any other contingencies which might be used to weasle out of the contract?
Since you have brokers involved I assume you used the standard real estate contract for your area. A good local real estate attny will know the clauses in the contract which have been successfully used to weasle before.
You may have trouble here, though because I imagine you signed a contract which the buyer thinks of as a very good deal and he wants to protect his deal. Since you got a full price offer first day I suspect you had under-valued the house to start with. However if the buyer under those circumstances is an investor he may be willing to take money to walk away from his contract.
Short of those things your option is basically to become very uncooperative. Make sure the appraiser sees the house in the worst possible light for example, maybe he will come in at a number where the deal dies. Simply refusing to close is another option. The seller may file suit for specific performance but to do so will require time and money on attny's fees and he may decide its not worth the trouble.
At any rate see a good real estate attny immediately. Weasleing is, after all, what they are best at.
Mark
Some will say a contract is a contract is a contract and once signed, must be agreed to buy all parties no matter what. Of course, they are not taking into account the human factor.
The way I read your situation; you have a family medical emergency that is overriding your decision to sell.
This is only my opinion, but if I was in this situation I would contact the broker of your real estate agent; who is the one who actually owns the listing on your house, and explain the problem.
From reading your post, you state, you sent a letter of mutual rescission. Is that a mutual rescission from both you and your buyer? If so, then it sounds like the only one to profit from this deal is your real estate agent.
If after meeting with the agent’s broker, and you are not satisfied with the results, I would then send a certified letter to that same broker outlining the results of that meeting, with copies sent to the local board of realtors and the state Department of Real Estate.
I of course would try to resolve this at the lowest level, but be ready to do all of the above, including having to obtain an attorney.
Because the agent did procure a buyer during the listing agreement time frame, the real estate agency may be still entitled to their commission, even if you did not proceed with the sale.
Best of luck
John (LV)
[ Edited by jfmlv1950 on Date 03/25/2004 ]
My agent sent the letter of recissior, with his signature to me and I signed and was sent to the buyers agent. (included refund of their dep.). [There has been no reply for signature/release from contract as yet. The buyers have asked for another showing and appt. for appraiser - I have refused and asked to meet with buyers. I just have heard basically see you @ closing???
Both brokerage firms (not just yours) are legally entitled to their commission earned (usually 6-7% of the contract price). The buyer may take you to court as well and you need a lawyer (cha-ching$$).
Keeping your home may be more costly than just finding something else.
Will your relative be selling a home? Use this equity to help with living expenses. He will qualify as a dependent, resulting in tax savings, etc... Are you sure keeping your home is the only possibility?
If your home is not a ranch style with wide hallways for wheelchairs, wide bathrooms, and other "senior friendly" features... do yourself a favor & move out!
Make that Realtor work again - finding something even more compatible for your family.
Start using all of that energy & money trying to keep it and use it to actively pursue another place.
Taking on an ailing relative is tough & overwhelming. It seems you are in the "panic stage." Go over the figures again using any possible social security benefits or retirement he may have & re-figure it again.
I know this is not what you want to hear, but have faith that something better is out there waiting for you.
Fellow Buckeye,
OHhouse
The original post highlights only one problem with selling. The issue that there would be problems covering the added costs. If that is really the issue, consider other ways to solve that problem. As someone else suggested, the person selling and then moving in might be able to contribute (either equity contribution of payments monthly form the equity received from the sale).
There might be ways to get out of the sale. It will likely cost you a significant sum of money (commissions, legal costs, damages to the buyer who you are backing out on). Add them up and then consider if you can afford to stay.
If there is a different problem with the move (other than the costs), highlight that so we can offer suggestions.
John
Our original thought was that we signed the contract Sunday night @ 10:30 PM. We discussed through the night and made the decision to contact agent first thing Monday Morning - called about 8:00 AM to stop both process of buying & selling. The Main Reason is cost. My wife will have to travel up there to care for and sell their property. Along with bringing her dad down here and providing care etc. With the anticipated additional costs we PROBABLY could not afford anything even as basic as what we have now. We would have to move "down" and probably take out a loan for furniture etc. / care of parent. Keeping what we had now made more sense if we could stop the deal 9 hours after signing the final contract. It is going to be a major change in lifestyle for us and our two kids - and a move to a lesser property? [Thank you all for your replies]
Here are a couple of thoughts...
Get in touch with your buyer (you'll have to fight his agent to get to them) and take them out to lunch and kindly explain the situation. If you can persuade them to keep looking, then do so. Perhaps you can pay them $1000 to move on. Perhaps you can help them find another place by talking to home owners, FSBO's, etc.
The contract is between you and them AND NOT your realtors. They will try to convince you otherwise, as they're both on the way to recieving a pay check, whether it's in the best interests of their clients or not. They'll fight you on this, but you need to be talking with the buyer themselves.
As for the buyers, find out what they need and see if you can fill it in other ways.
As hibby76 said, the contract is between you and the buyers. However, it sounds as if the obstacle is coming from the buyers' agent, not from your agent.
When you make contact with the buyers directly, I would be prepared to give them something in writing that explains your reason for terminating the contract and specifically says that you will not put your property back on the market.
If, in fact, it is the buyers (and not the buyers' agent) who are playing hard ball, it may be because the buyers think you want to ditch the deal with them to put your property on the market at a higher price.
In Texas, for a real estate contract to be a contract, you have to have a meeting of the minds. That means buyer makes offer, offer presented to seller, seller signs, and buyer or buyer's agent notified in writing (faxes work too.) Your realtor probably faxed the response back Sunday night, not Monday morning. If you have a meeting of the minds, the commission is due and payable in full because the buyer's agent brought you a ready, willing and able buyer and it's reinforced by a fully executed contract.
You say the offer was presented, but unless the buyer executed it and notified you or your agent, it ain't a contract. As long as your agent recinded in writing before the buyer's agent faxed the signed contract back (and your realtor keep a confirmation cover sheet with a time date stamp
The key is the timing of the signed contract notification and the signed recission. The long of it short, spend 150 bucks and talk to a real estate attorney on Monday morning. It does sound like you'll own a commission but they'll have to sue you to get it.
What was the selling price of the house? :-?
TO: TOYTRIX02
Have your agent arrange a meeting with the buyer's agent or that real estate office's broker along with the buyers. First try to resolve this canceling the sell and purchase of your home within the real estate offices.
Immediately contact the title company to draw up cancel escrow instructions in addition to what your agent has already prepared. You as the seller can contact the title company directly to cancel escrow. Sign the cancel instructions and have those papers forward to the buyer.
Work with both your agent, your agent's broker, and the title company.
GOOD LUCK !
Cheryl Lopez
Most states have a 3 day recission period on
all contracts. This is the very reason when
you refinance your house in most states there
are 3 days to back out. In this case mortgage
brokers lose commission!! See where you stand on this rule in your state. Seems to me
if you insist on certain deed restrictions to be
applied to the house your selling,which you
can do, It might shed a new light on whether
the buyers will buy!
It sounds as if at least one of the realtors is saying dont let the door hit you on the way out. And the facts are when yee ol might buck is involved, people will fight tooth and nail to get it. Most people will under stand your plight and perhaps the buyer will too, all you can do is try to explain the situation and maybe provide some kind of proof as well.
John
Robert Bruss, in one of his syndicated real estate articles, said that while a buyer can sue for specific performance, the court rarely finds in favor of the buyer.
Seems that the buyer has to prove that he was damaged by your failure to perform for the court to find for the buyer. Very tough to do when there are other houses on the market similar to yours.
From your postings, it sounds like you received an offer from the buyer which you accepted on Sunday night. Unless you made a counteroffer, your acceptance ratified the contract. You will owe the real estate sales commission, even if the buyer withdraws gracefully.