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This happened to me 10 days before closing in NJ. We were already packed, had a contract on a home in NC, jobs all lined up. The buyers had put $7k in earnest money. They wanted it all back. I was super angry and frantic all at the same time. I told my lawyer do not give them the earnest money. We immediately put the house back on the market. And emptied our boxes so we could make the empty house look like a home again. Unreal. The buyers were getting very mad about not getting their earnest money back. They fired their attorney.
After about 6 weeks I was told the buyers had done the very same thing to 2 other houses. They would contract them and then walk away at the last minute always getting their deposit back. We were house #3 to them. We put up the biggest fight. 2 days after they said they didn't want to buy my house they went to another realtor's office and got a new realtor to make an offer on a different house. So their original realtor who had worked with them for months and drove them all over town was getting jerked also.
Long story short, no other attorney would help them so they were forced to go back to the original attorney who they fired. After months of holding their $7k they got all of it back except $500.00. The cost associated with going through the legal system would take a year or more and would have ended up costing me $ in the end.
I did put the "Italian Horns" on them though. I hope they still feel it.
All I can say is everything happens for a reason. I'm glad we didn't end up buying the first house we contracted in NC. Luckily, those people were able to get another buyer for their home within a week.
The attorney we consulted is actually pending a similar case right now...he is just waiting for the individual to sell the house so they know exactly how much the damages are for. He did not mention that you have to settle the lawsuit in order to proceed on another contract.
What is America coming to? Contracts are to be honored by both parties and the contract that I signed does not say anything about escrow being the only means for damages unless a loan is not funded with a reasonable explanation from the lender after 21 days from the effective date.
There is precedence for lawsuits in this case and the attorney stated that more people are trying to go this same route, which can happen in buyers markets. However, the seller is protected by law and the contract against this nonsense.
Im not conceding a *&$@ thing to these unethical jokers.
I hope that the OP suffers as little harm as possible in this case and keeps all the earnest money.
We are buying our first house in less than two weeks. We are not spring chickens. We are very nervous about it--we love the neighborhood, but the house itself is not exactly what we wanted. The price was at the top end of our abilities, and the interest rates have gone up; we're paying 3.25 points.....Oy!
We made an offer on this house well over a month ago, but we always had some doubt in the back of our minds. We know there's no such thing as the perfect house, but on some days, I'd go to sleep thinking that we were making a huge mistake. The sellers are retiring and moving far away once we close. So equally, I'd toss and turn about what it would mean to them if we pulled out; rumor had it that we were the only couple to look at their house.
So many times we talked about how we should break this contract and come back shopping for something that made more $en$e for us. But, we are absolutely going through with this closing, and we hope to heaven that we can manage the month to month expenses and survive this grand life adventure.....
We believe that pulling out of this deal would have been the worst karma. There are some of us out there who aren't seasoned veterans but we're hanging in there because we know that there are other human beings involved.
Good luck to the OP and anyone else in his situation~~
Hey, everybody suffers a little buyer's remorse. Its pretty natural. However, your earnest money is the minimum amount of damages someone could be willing to accept for a buyer not performing as they agreed, not the maximum...and that is the case under any contract law. Doesn't matter if you are buying a car, house, etc. I believe the case law precedent is that you can pursue one of several routes for damages. Either 1) accept earnest money as damages, 2)other mutual settlement, 3)sue the buyers to perform and purchase the house, or 4)sue them for monetary damages, which would include but may not be limited to the difference in the price of the home, realtor commissions (which my realtor could ask me to pay regardless of close), legal fees, mortgage payments, utilities, taxes, etc. We have also found out that you can re-market the house and not face any legal implications (ie, automatically letting buyer out of contract). It is a little complicated on the offer side, or so I am told.
Our opinion is that if the buyers' for whatever reason don't want the house, they can close and then put it back up for sale the same day. That is by far the cheaper and least expensive route to go rather than face litigation.
I have quickly learned that this is a very big deal and in no way should you try something without getting excellent legal advice. Contracts are contracts, no matter what side of the transaction you are on.
In another note...why IN THE WORLD ARE YOU PAYING 3.25 IN POINTS!???? Are you a subprime or credit impaired borrower? I've never heard of such a crazy fee nor can I believe somebody is charging that. Rates are a little higher but a 30-year is still at 6.5%. Heck, even an FHA is around 6.5 - 7.0%.
Quote:
Originally Posted by Lana537
I hope that the OP suffers as little harm as possible in this case and keeps all the earnest money.
We are buying our first house in less than two weeks. We are not spring chickens. We are very nervous about it--we love the neighborhood, but the house itself is not exactly what we wanted. The price was at the top end of our abilities, and the interest rates have gone up; we're paying 3.25 points.....Oy!
We made an offer on this house well over a month ago, but we always had some doubt in the back of our minds. We know there's no such thing as the perfect house, but on some days, I'd go to sleep thinking that we were making a huge mistake. The sellers are retiring and moving far away once we close. So equally, I'd toss and turn about what it would mean to them if we pulled out; rumor had it that we were the only couple to look at their house.
So many times we talked about how we should break this contract and come back shopping for something that made more $en$e for us. But, we are absolutely going through with this closing, and we hope to heaven that we can manage the month to month expenses and survive this grand life adventure.....
We believe that pulling out of this deal would have been the worst karma. There are some of us out there who aren't seasoned veterans but we're hanging in there because we know that there are other human beings involved.
Good luck to the OP and anyone else in his situation~~
Each time we bought a house, when we wrote up the purchase offer, we made sure to protect ourselves and in fact, had an attorney there, as well as the agent, of course, to help advise us. So we specifically spelled out the reasons we'd want out of the contract with no ramifications. Obviously, if we didn't qualify for the loan (one reason we state PRE-APPROVED, not just PRE-QUALIFIED, when we sell), the inspection report came back and both parties were unable to come to agreement on how to proceed to fix the issues. If the house we were selling didn't sell. And a few other contingencies.
As a seller, you are bound to protect yourself in the same manner (like Apexguy appears to have done).
In my mind, 'buyer's remorse' is not a reason to walk away from a deal without making the seller whole in some way.
How legit does an inspection-based reason have to be in order to legally back out? If you've changed your mind and the inspection contingency is the only one, and the inspection report says that baseboard in the 4th bedroom is damaged, even if the sellers volunteer to replace this can you still legally walk away and say that the house didn't pass inspection? Sketchy, sure, but "buyer's remorse" does sound like a turdy reason to back out - they couldn't come up with a legit justification?
How legit does an inspection-based reason have to be in order to legally back out? If you've changed your mind and the inspection contingency is the only one, and the inspection report says that baseboard in the 4th bedroom is damaged, even if the sellers volunteer to replace this can you still legally walk away and say that the house didn't pass inspection? Sketchy, sure, but "buyer's remorse" does sound like a turdy reason to back out - they couldn't come up with a legit justification?
We sold in May. Our contract had a dollar amount (I think we had $5k) for the inspection. My understanding is if the repairs were under that figure and we agreed to do them, they could not get out of this contingency. If it was over $5k, then the buyers had the option to walk. I could be wrong, but that was my understanding of our contract.
We sold in May. Our contract had a dollar amount (I think we had $5k) for the inspection. My understanding is if the repairs were under that figure and we agreed to do them, they could not get out of this contingency. If it was over $5k, then the buyers had the option to walk. I could be wrong, but that was my understanding of our contract.
That is interesting - thanks for sharing! Seems like there could be problems under 5k in cost that would be deal breakers to me if I wasn't still locked into buying with an owner's fix (maybe mold remediation, termites, etc) but that's interesting!
That is interesting - thanks for sharing! Seems like there could be problems under 5k in cost that would be deal breakers to me if I wasn't still locked into buying with an owner's fix (maybe mold remediation, termites, etc) but that's interesting!
I think termite and radon might be separate. I believe the $5k was set by the buyers in our case.
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There are a few decent folks out here.....
