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My wife and I found a great short sale house and made an offer on it with our Real Estate Broker. We signed the offer at her office and went home. She recommended a Real Estate attorney for us and sent the offer to his office. The seller accepted our off and Next thing you know we are out of attorney review.
The attorney set an expiration date of December 31st for the banks to come back with an approval. Remember its a short sale so both banks have to agree on the sale price.
So here we are about 7 weeks in and my wife and I found an even better house in a different area, not a short sale and even less expensive.
I want to get out of the first house deal but my attorney says im officially in a legal binding contract now and can't get out.
I never put any money down. Usually the broker takes a thousand dollars but we never did that. So what exactly do i have to lose if I just walk away.
Don't you have to sign a real contract in order to be in a contract? I signed a simple offer to purchase. This is our first house in NJ so forgive me if im not fully understanding of certain laws that might be unique. We want to make an offer on this second house and I don't feel legally obligated to the first one.
Any help or advise is greatly appreciated
Thanks
So your attorney is advising you one thing and you disagree? Call another attorney and get another opinion. This is certainly not anything you want to mess around with. And certainly not with a bank who has an army of lawyers at their disposal.
EDIT: And you may want to post this on the real estate forum as well.
My wife and I found a great short sale house and made an offer on it with our Real Estate Broker. We signed the offer at her office and went home. She recommended a Real Estate attorney for us and sent the offer to his office. The seller accepted our off and Next thing you know we are out of attorney review.
The attorney set an expiration date of December 31st for the banks to come back with an approval. Remember its a short sale so both banks have to agree on the sale price.
So here we are about 7 weeks in and my wife and I found an even better house in a different area, not a short sale and even less expensive.
I want to get out of the first house deal but my attorney says im officially in a legal binding contract now and can't get out.
I never put any money down. Usually the broker takes a thousand dollars but we never did that. So what exactly do i have to lose if I just walk away.
Don't you have to sign a real contract in order to be in a contract? I signed a simple offer to purchase. This is our first house in NJ so forgive me if im not fully understanding of certain laws that might be unique. We want to make an offer on this second house and I don't feel legally obligated to the first one.
Any help or advise is greatly appreciated
Thanks
The initial purchase agreement, with the addition of supplemental modifications that are added during attorney review is a contract.
If you want to get out of that contract, you need to use one of the contingencies in the contract. The standard contract has two more that you haven't cleared yet:home inspection and financing. Home inspection can fail for any reason you want it to. Financing may get you off the hook if the appraisal comes up short but you don't have control over that.
Just my opinion -- you will always find "even better" houses after you go under contract -- that is, in a nervous twinge of buyers remorse, you may scan the listings and see one that looks better than the one you agreed to buy. But then, did you carefully review the seller disclosure, inspect the "even better house", negotiate to test how much the seller will move from the list price, etc ? My impression shopping the NJ market for a while, is that most places that were heavily discounted turned out to be discounted for a reason (common reasons include: flood zone and/or water flow/damage issues, busy/noisy street, disclosed or undisclosed maintenance issues, excessive property taxes or HOA fees, neighborhood/location not as desirable). You might find these 11th hour "even better houses" turn out not to be so great on closer examination.
I'm guessing though the home inspection is not set to happen until after the bank approves, so that may have to wait until after December 31st. Maybe you will get lucky and the bank won't approve the purchase price and then you don't have to go through the hassle of doing an inspection.
Yes, you can break it. It is not official until the "CLOSING" documents are signed. Attorney review means nothing. Go ahead and move on. Only thing you can lose it what was put in Escrow.
Todd you are incorrect. Once the contract is signed and you are out of the attorney review period it is legal and binding, and if the banck wanted to pursue they could. They would not only be on the hook for what is in escrow but would also be liable for any processing cost, costs associated with relisting and re0advertising as well as costs associated with having to hang onto the property for longer which is very subjective. The banks have deep pockets and large attorneys, so before telling soeone to just walk away, you might want to tell them discuss with an attorney, which they have done and have been told that there is no out at this point.
Wait for the inspection and hope something fails...that will be your only legal out at this point.
I am not an attorney but just purchased a home 3 months ago and am now very well versed on NJ real estate laws. The OP should contact an attorney for advice, but the closing papers are not the legal contract for sale, the closing papers are the just that, the transfer of ownership. Once out of attorney review in the state of NJ you are legally bound by the contract, and if you google it, there are many court cases which have backed that up.
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