Legal ramifications one of backing out a day before closing

Log in / Sign Up

List of Forums + New Post Recipe Box Usergroups Following My Posts Bookmarks

Private Messages Advanced Search Rules New User Guide FAQ Advertise Contact Us

Forum -> Household Management -> Finances

View latest: 24h 48h 72h

amother

Burlywood

Sun, Mar 27 2016, 9:27 am

I would reimburse the sellers for their mortgage and taxes and insurance for the time that we were under contract. I would pay around 2500 dollars. Should I also pay the guy who is doing our mortgage? His fee is around 1700.

Or should I just purchase the house and then immediately put it back on the market. I will likely lose the appx 8000 dollars in closing fees but can prob sell the house for the same price I paid.

What is the best ethical and legal option?

ROFL

Sun, Mar 27 2016, 9:29 am

Why don't you want to buy the house ?

STovah

Sun, Mar 27 2016, 9:41 am

I don't think you'd legally owe anything to anyone (other than your own legal fees and any costs your bank may charge you) the seller may have the right to keep your deposit. I personally don't think you'd have any ethical obligations either. It will be very uncomfortable and awkward but in the case of such a major decision (as buying a house is) you need to do what is best for you.

amother

Burlywood

Sun, Mar 27 2016, 9:54 am

We changed our mind regarding the move. It has more to do with the area then the house. It's actually a really nice house for a good price. Do any lawyers or realtors have any input?

tulips12

Sun, Mar 27 2016, 9:56 am

Why don't you ask your lawyer? It depends what was written in the contract. It can go both ways. I've seen a contract where the buyer wasn't sure that the seller will follow through with the sale so there was a penalty clause.

amother

Burlywood

Sun, Mar 27 2016, 9:59 am

OuR realtor said That the sellers will be very upset and can take legal action, but couldn't specify what they would or could do.

amother

Maroon

Sun, Mar 27 2016, 10:07 am

When we had a problem with one of the papers before we closed with the loan person. ( bh we had a good realtor who figured out what to do) Our realtor said that if we go forward and their is a problem later on then the seller would have rights to sue us.
Defiantly find out more it could be more then just flipping it.

watergirl

Sun, Mar 27 2016, 10:08 am

amother wrote:

OuR realtor said That the sellers will be very upset and can take legal action, but couldn't specify what they would or could do.

The realtor may be trying to scare you so they dont loose commision. Ask a real estate lawyer, and fast.

cnc

Sun, Mar 27 2016, 10:10 am

watergirl wrote:

The realtor may be trying to scare you so they dont loose commision. Ask a real estate lawyer, and fast.

This.
Do you not have a lawyer that wrote up your contract?

Chana Miriam S

Sun, Mar 27 2016, 10:17 am

amother wrote:

OuR realtor said That the sellers will be very upset and can take legal action, but couldn't specify what they would or could do.

This is absolutely possible. The hardship you are causing them, especially if they were counting on your sale, for whatever reason is horrible. I think you should buy it and sell it immediately rather than hurting the vendor who did nothing to you, you are just being fickle.

I admire your wanting to do the right thing!

Chana Miriam S

Sun, Mar 27 2016, 10:18 am

watergirl wrote:

The realtor may be trying to scare you so they dont loose commision. Ask a real estate lawyer, and fast.

Where I live, the vendor could absolutely sue.

SYA

Sun, Mar 27 2016, 10:27 am

No one can give proper legal advice without knowing the laws in your location and what your contract states.

As a pp mentioned please speak to a real estate lawyer ASAP.

amother

Burlywood

Sun, Mar 27 2016, 10:40 am

I don't want The seller to lose money because we changed our mind. If we reimburse them the costs mentioned above is there a reason for them to sue us further? Should we also reimburse them for the things that they fixed for us? But on the other hand they were basic things that anyone would have asked to be corrected.
Maybe it's less expensive to just buy it and hope that we don't lose too much money.
Either way we are going to lose money.

amother

Salmon

Sun, Mar 27 2016, 10:42 am

To reiterate what others have said, the devil is in the details of the contact. You can be liable and subject to the consequences specified in the contract. No one here knows what it says in your contract and the person who should be advising you is your attorney. I would mention that its very tricky to determine how much you'd lose if you would go thru with your current deal and buy the house and then quickly sell it. First of all, if you hire and agent when selling, you would have to pay them around 4%. Secondly, you are in no way guaranteed to get the price you paid for it. People might be spooked that your turning around and selling it so fast. Even though your reason for selling (location) might not apply to them, they might think your hiding something. For me personally something would feel a little off buying a house from someone who just bought it themselves. I would wonder if there's a crazy neighbor? Wild dogs on the block? Some water problem that a potential buyer doesn't notice right away? I'm not saying I wouldn't buy, but I'd think twice. Hatslacha!

amother

Maroon

Sun, Mar 27 2016, 10:43 am

If they were using your sale to buy another house and you back out then they don't have the money for their new house and they will have to back out and will be sued because of you.

amother

Mistyrose

Sun, Mar 27 2016, 11:42 am

amother wrote:

If they were using your sale to buy another house and you back out then they don't have the money for their new house and they will have to back out and will be sued because of you.

This is probably not true; however, you must check your contact and speak with your attorney. Often contacts contain a liquidated damage clause, and the seller would keep your deposit insert these circumstances. Paying the carrying costs of the house makes no sense since. It is odd.

imasoftov

Sun, Mar 27 2016, 12:53 pm

Another vote for asking your own lawyer and no one else.

If you don't have one (or you've been using the same lawyer as the other side), get your own lawyer now.

sweetpotato

Sun, Mar 27 2016, 4:36 pm

Ask a lawyer immediately and send them all the contracts and documentation. Your contract will specify what you are liable for in this event. It sounds like you have a bad realtor who is more concerned with seeing the deal through (and getting the commission) than with helping you with your specific needs. The realtor is supposed to represent you, their client.

You don't need to go above and beyond what the contract requires; this is why we have legal contracts. The burden is on both parties (and their lawyers and realtors, who have a fiduciary duty to them) to make sure the contract adequately protects them through the negotiation process. I have no idea if any halachic issues could be involved, but if it's possible, as a rav as well.

You should quickly find out whether it's financially/legally preferable for you to back out now, or see the process through and put the house back on the market. If your realtor isn't giving you more information, that's a big problem.

As to whether it's ethically wrong to terminate a contract... the contract should have been written in such a way that it provides some financial protection for either party if one side doesn't hold up their obligation.

Also, you should think long and hard about what made you get this deep into a house purchase and do a 180.

Hatzlacha!

amother

Mistyrose

Sun, Mar 27 2016, 5:40 pm

sweetpotato wrote:

The realtor may very well work for the seller. We don't know the agency here.

amother

Seafoam

Sun, Mar 27 2016, 7:14 pm

OP, the most likely scenario is that you will lose your deposit. This is the money you gave that was put into escrow when you signed the contract. It is typically tens of thousands of dollars, depending on the home purchase price. This is typically written into the contract to protect the seller from situations such as these.

Page 1 of 1