Breaking a contract that was just signed?? (contingent, documents, agent)

[marti'swife]

We got an offer on our house on Monday we went back and forth on offers until yesterday we came to an agreement. We would have to pay money at closing to get out of the house. We signed the contract last night and faxed the paperwork to the realtor. This morning we got a call from our realtor and we got another offer on the house that was 12,500 more than the first offer. What would happen if we backed out of the first offer, after we signed the paperwork? Can they come after us? Any advise would be great.

Tracey

[Brandon Hoffman]

Originally Posted by marti'swife

We got an offer on our house on Monday we went back and forth on offers until yesterday we came to an agreement. We would have to pay money at closing to get out of the house. We signed the contract last night and faxed the paperwork to the realtor. This morning we got a call from our realtor and we got another offer on the house that was 12,500 more than the first offer. What would happen if we backed out of the first offer, after we signed the paperwork? Can they come after us? Any advise would be great.

Tracey

Check your contract for possible penalties. You really need to discuss options with your agent and see what they have to offer. In our local contract it allows the buyer to sue for specific performance (they can force you to stick to the contract plus recover legal damages).

Talk to your agent and see how solid the second offer and hang on for a backup. What would cause them to want out? There's always the possibility the home inspection addendum could work in your favor Of course, if you get out the first and then the second fell through for some reason...

[dixiegirl7]

Was their offer contingent on anything, like them selling their house, with a condition that you would be accepting back up offers in that time?

[ShannonMilligan]

Depends on the state too. We had a signed contract in NY with someone to sell our home and the same thing happened-we got another offer for a lot more. In NY an attorney has to approve the sale and they have 3 days to do so. We just called the attorney and he did NOT approve the sale and we sold to the couple with the higher offer.

[palmcoasting]

You should be contacting a real estate attorney to see what the liabilities and ramifications are.

[acegolfer]

As others said, there could be some options depending on where you live. Talk to the attorney.

It's also possible that the buyer can't get financing, which happens more often that you may think. This actually happened to me. I was the eventual buyer and the first buyer failed to get a loan. Of course, I don't know what the first offer was. But I was so glad that the house was back on the market. I had an eye on it but it was sold one week prior to my house hunting.

[Silverfall]

In Oregon, the buyer could sue you for performance and force you to sell the house. Our contracts don't give sellers a lot of outs. If you are lucky, the agent won't deposit the earnest money on time which would be a seller out here in Oregon.

I would take the other as a back-up offer and see if the other deal falls through.

[middle-aged mom]

Originally Posted by twinmma

Depends on the state too. We had a signed contract in NY with someone to sell our home and the same thing happened-we got another offer for a lot more. In NY an attorney has to approve the sale and they have 3 days to do so. We just called the attorney and he did NOT approve the sale and we sold to the couple with the higher offer.

Works this way in Illinois, too.

[haberstroh]

This happened to us when we first started to house hunt in NJ/NY. Except we were the buyers. After 3 weeks we thought the documents were all in order (or so we thought) and we had already the inspection. Then the seller's agent called and said that there was another offer $15000 more than ours. It also happened that there was only one more day on the attorney review period left (they had dragged out the signing of the documents despite us pressuring them). We did not have the means to go up in price and lost out. And there was not much else we could do (besides some yelling at the agent ;-))...we even lost the inspection money. This was very stressful for us since we were out of state, on a job relocation and I was 8 months pregnant. We ended up renting because we could not find another house so fast (this was also during the "boomyears").
I guess what I am trying to say is that it depends how far along in your contracts you are and what your local laws say. I am also trying to say that although we got financially and mentally hurt you can't blame the seller for trying to sell to the the highest bidder. But than again it might not always work out. Today a lot of closings blow up in the last minute.
Hope you can work it out somehow.

[Korillian]

I think it's interesting that people talk about breaking a contract so casually. You entered into an agreement with these people and now you want to back out because something "better" has come along. Does that seem like it's the right thing to do?