Contract Issues

I have a contract to purchase a house, but the three owners are having a family feud and cannot agree on anything. The sale of my own house closes soon and the lock-in on my loan is up in a few days. What can I do?

You may have to rent a motel or move in with friends or family until the issue is resolved. There is risk in buying real estate, especially when you make your own moving plans very firm. No one can guarantee a sale will close on an exact day because situations can come up unexpectedly, just as it happened to you.

Fortunately (June 2000) rates have declined since you locked in your interest rate. Most lenders will extend a lock (once it expires) at the higher of the current market rate or the rate you originally locked the loan. So most likely, you will not be hurting any on your interest rate because of the delay.

In short, you’re pretty much stuck and you have to hope the sellers can work out their problems.

I agreed to buy a house and now I’ve changed my mind. How do I cancel?

This may not be the answer you were expecting.

For the answer to this, you have to look at your contract. The contract is the legal agreement you have made with the seller. Most contracts have certain contingencies where a cancellation is acceptable. To cancel for reasons other than that, there are often consequences and such a decision should not be taken lightly.

Keep in mind that while you have been preparing to close the transaction, the seller has taken his home off the market and may have entered his own contract to purchase a home. This can create a chain of sales and purchases, all depending on you to fulfill your obligation. If you do not fulfill the contract, your decision may affect many more people than just one seller.

For the legal consequences of canceling a contract, you may have to consult an attorney.

The buyer now wants out of the contract to buy my home. The contract has been signed by both parties. What are my rights, and do I have to keep my home?

When people break contracts, you can’t generally force them to go through with the transaction. What you can do, if you can prove damages, is try to recover the damages in court or through arbitration.

You can attempt to talk to the buyers and find out what the problem is and try to resolve it. It may be something easily you can easily resolve, but maybe not.

My husband and I have already signed a contract to sell our home. However, we have since changed our minds and no longer want to sell. Can we get out of selling our home?

First, look at the contract and see if there are any contingencies that allow you out of the contract.

You can always decide not to sell.

You just don’t know exactly what the buyer’s reactions are going to be. You don’t know if they will attempt to enforce the contract. You don’t know if there will be legal repercussions. You might want to get an attorney’s opinion at some point, since we do not provide legal advice.

If you do cancel, think about ways to soften the blow to the potential buyer who has put up an earnest money deposit, may have already paid for a credit report and appraisal, and may be charged a cancellation fee by the settlement agent. They may have already given notice (if they rent) or sold their own house, too.

If you reimburse them for some of their hard costs, maybe they will not try to enforce the contract.