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They were going through a divorce and the then reconciled and refused to sign...
I spent $1000 on lawyer fees on a home under contract for $130k plus I was out inspection and appraisal costs.
The Realtor was a friend of their family so was not much help... she also did not go after them for commission... it all came down to the day of signing with loan docs, insurance, etc...
My lawyer said I had all probability of prevailing but asked if I was willing to spend 10k in legal fees and wait 6 to 9 months... I said no.
That was 17 years ago and the husband is still living there a broken man in failing health... his wife left him anyway and was later committed to a mental hospital... it really was a crazy situation and glad I didn't go after it.
I currently have my primary residence on the market which I plan to sell for another home which I am under contract to purchase. The purchase contract for my new home, however, risks falling apart due to several unique issues. If I'm unable to purchase the new home, I would like to be able to cancel any sales contract for my current home.
What are some good options for minimizing risk of litigation and/or financial loss if I need to abruptly cancel the sales contract of my current home?
You might put a clause in Special Provisions that gives you some type of out.
What kind of clauses would be appropriate in this situation? I'm also hesitant to ask for anything in the contract that might considerable weaken my position as a seller.
If the buyers do not need to buy within a definite time frame, you could ask for an extension of the closing date for 3 or even 6 months if they are amenable. Or you can do a leaseback until you find a home that you want to purchase. A leaseback is where you sell the home to the buyers but they allow you to lease it from them for a certain amount of time and for a certain amount of rent per month. That rent can be any mutually agreed-upon amount, including nothing. A lease back gives you the added benefit of being able to close more quickly if you need the proceeds from your current home to purchase your next one.
What kind of clauses would be appropriate in this situation? I'm also hesitant to ask for anything in the contract that might considerable weaken my position as a seller.
If a buyer has a choice between one property where the seller can end the contract without default and another with no such provision, they will most likely pick the one without the potential drama. Whether it is a contractual "out", a leaseback, or some other non-standard demand, you need to understand that you are weakening your position as a seller. That doesn't mean that it won't work out just fine but it does mean that working out just fine is less likely. The odds are greater that you will need to offer some sort of concession (price, terms, freebies thrown in, money toward closing costs, etc.) to attract a more willing buyer.
A contingency for seller to cancel based on their new purchase? Not going to happen if I was your buyer. You may have contingency if you were possible delayed closing if you were getting a new house built but that is delayed.. not canceling a sale contract.
First, is there any particular reason that you didn't put this in the same thread as basically the same ? you had earlier?
If the house you're buying has a significant enough chance of falling through, certainly that action will occur very soon. And so you could just terminate your contract as Buyer without worrying about the sale of your home.
That's the logistics.
I also wonder why, if your purchase falls through ... are you just going to stay put? You wouldn't go buy a different home?
Legally, you have to go to the contract in your state. And use your Realtor to answer your question and then an attorney (maybe your closing attorney as Buyer now, if you use attorneys in your state) to create the language that protects you more than the standard contract does.
As mentioned... my seller cancelled and left me standing at closing... the listing Broker let it go as there was a family connection and the Broker had both sides...
After seeking legal advice and having my lawyer send letters I simply decided to drop it... the cost in time and money simply was not worth it... today the home looks abandoned and the husband is lives like a hermit... the divorce Nuked the family and he was never the same... the home is near a rental I own.
A builder I know backed out... his daughter wanted the home and the buyer sued... it took a long time to go to court... the buyer won in 2008 and the court ordered specific performance...
After thousands in legal fees and a win... the buyer backed out as Real Estate here was in free fall... the builder was more than willing to sell at the original price as ordered... it is just in 2 years from 2006 to 2008 the price peaked and then collapsed...
You can put a clause of the sale subject to the seller finding AND closing on a property. I know I would if I didn't already buy a house. I'm not selling if I haven't closed. But for the most part I buy then I sell which gives me more control and less pressure from the buyer. If a buyer didn't agree that's ok. We just each go our separate ways
The house we bought had that instance. The seller wasbuying a house and AFTER we closed he had 5 day to get out. He called and said the seller of his house backed out at closing. He was devastated. I was willing to let him lease back as I didn't need to move ASAP. He had to do some legal threatening to get the sale to go through.
But most would say sorry I want my house.
Last edited by Electrician4you; 12-04-2016 at 11:10 AM..
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Termination options for Sales Contract
