Not Closing On Homes
Hello,
This question is not so much based on investing in homes but rather on what can come of not closing on a home after a contract has been signed.
I live in New Jersey and I have signed a contract to purchase a condo. Since then, there have been many issues in closing such as tax liens of the previous owner and the terms changing in my loan.
My closing is tomorrow and I do not want to close. I have already given 3k as a deposit and I am willing to lose that and more. I have also discussed walking away from the table to a few people and they have mentioned I could be sued. The three terms under which I could be sued for were referred to as liquidated damages, time of essence, and specific performance.
If I choose not to close will I be sued and is there what are the amounts based on a $200,000 purchase?
I would very much appreciate any help that can be extended to me.
So is it safe to assume that he has absolutely no ground to sue me for other damages?
Agree with previous post, most contracts state the terms of financing as a contingency. If your loan terms have taken a turn sout, it may be enough to "weasel" away.
Eric
Allways have a contingency. Subject to buyer approval of inspection, financing, anything like that. Always make it limited to your earnest money being COMPLETE LIQUIDATED damages. Good luck,
Wiz
[addsig]
[ Edited by alexanderwyoung on Date 01/29/2010 ]
yes-that is the first thing that I thought- I was just curious to see if anyone had heard of it.
[ Edited by alexanderwyoung on Date 01/29/2010 ]
There are companies that giving advances for people waiting for their inheritances. I would suggest that for the buyer so you can get some cash up front.
trust but verify!!!!
I have a similar situation as an hard money investor. I put up the money for a property for another investor and was supposed to get funded in a week. However, I put clauses in our agreement that my fee ratchets up after 1 week, 30 days, and 60 days i own the property. There is 150k profit in the lake property on an immediate sale.
Not only legal, but common practice in my area for new construction projects where you are the first buyer. This requirement should be well defined in your purchase agreement.
If you sign the purchase agreement, then you have agreed to the capitalization requirement. I just treat the HOA capitalization requirement the same as an HOA special assessment and expense it as such on my Schedule E.