Quick question about going under contract (Tampa: real estate, mortgage, loan) - Tampa Bay - Florida (FL) -Tampa - St. Petersburg - Clearwater - City-Data Forum

trevor0101 · 08-08-2014, 10:13 PM

My wife and me negotiated, and made an offer on a property in Tampa this morning. It has been accepted by the seller. However, while I was out for the day, my wife decided to see one more property with our realtor, and fell in love with it. I am seeing in tomorrow. We have not provided earnest money, or anything like that yet. I'm agonizing a bit here. If I see it tomorrow, and also love it, is there anything stopping me from going with it, and canceling with the first seller? I'll be talking to my realtor tomorrow, but wanted to get feedback from the forum. We have a 15d due diligence on the house on an as-is contract. My feeling is that other than being a jerk, there are no other negatives to me. True?

gulfporter · 08-09-2014, 05:56 AM

No earnest money???? Was it a written contract? We've bought and sold 8 homes over the course of our marriage in 3 different states and 1 foreign country and I've never heard of a contract without earnest money.

DUNNDFRNT · 08-09-2014, 06:46 AM

I have, there is a lag there between the time they accept and you give them the money, you will **** off your realtor more than anything, I dint knew where you are buying but when the market is really hot sellers don't care because they often have backup offers.

gulfporter · 08-09-2014, 06:50 AM

I hear what you're saying re: maybe the check hasn't been cashed yet. But IF the contract was ratified (signed by both buyer and seller) and the terms of the contract include $xxxxx for escrow, I believe it is the fiduciary responsibility of the real estate agent to go forward and put the check in escrow, regardless of the buyer's reticence. The buyer can still back out, but my guess is the earnest money will remain with the seller and real estate companies.

The Villages Guy · 08-09-2014, 06:58 AM

You can always back out during the due diligence period by saying you are unfomfortable with something in the inspection. Then all you are out is the cost of the inspection.

Buying a house is a huge expense. Buy the one you want.

gulfporter · 08-09-2014, 07:07 AM

The OP says it's an 'as-is' contract; that may mean there is no 'out' for inspection findings. But without seeing the language in the contract, it's hard to say. The OP should as he indicated, speak with their agent and hopefully there's a safe way out of the contract with little or no cost.

I agree with your statement, "Buying a house is a huge expense. Buy the one you want." However, I will add this cautionary statement, "Entering into a contract is a huge legal deal....think before you sign."

Also, there are few hot markets with competing offers these days; the seller may indeed want the contract to fly and may fight for it (and the earnest money). And, unless the buyers have very deep pockets and paying cash, they need to be very careful about proceeding with an offer on House #2 until the contract on House #1 is dead dead dead. If the buyers need a loan for their home purchase, until House #1's contract is legally kaput, the buyers could be in a situation where they are under a time deadline to apply for a mortgage for House #1, while they await the inspection so they can get out of the contract. Any live contract for House #1 will make it nearly impossible for them to get loan approval for House #2, unless they fail to disclose the existence of Contract #1. That's called loan fraud.

The Villages Guy · 08-09-2014, 07:26 AM

Quote:

Originally Posted by gulfporter

The OP says it's an 'as-is' contract; that may mean there is no 'out' for inspection findings. But without seeing the language in the contract, it's hard to say. The OP should as he indicated, speak with their agent and hopefully there's a safe way out of the contract with little or no cost.

I agree with your statement, "Buying a house is a huge expense. Buy the one you want." However, I will add this cautionary statement, "Entering into a contract is a huge legal deal....think before you sign."

Also, there are few hot markets with competing offers these days; the seller may indeed want the contract to fly and may fight for it (and the earnest money). And, unless the buyers have very deep pockets and paying cash, they need to be very careful about proceeding with an offer on House #2 until the contract on House #1 is dead dead dead. If the buyers need a loan for their home purchase, until House #1's contract is legally kaput, the buyers could be in a situation where they are under a time deadline to apply for a mortgage for House #1, while they await the inspection so they can get out of the contract. Any live contract for House #1 will make it nearly impossible for them to get loan approval for House #2, unless they fail to disclose the existence of Contract #1. That's called loan fraud.

You can still get out with as-is. It does not mean you have to take it. It just means the seller is stating they will not fix anything. Once the inspection is done, you take it as-is or you back out. Sometimes there is a dollar amount fixed to it.

sithlord72 · 08-09-2014, 08:48 AM

As long as you didn't sign anything I think you can get out of it.. remember, if it isn't on paper, it didn't happen.

gulfporter · 08-09-2014, 09:32 AM

Quote:

Originally Posted by North_Pinellas_Guy

You can still get out with as-is. It does not mean you have to take it. It just means the seller is stating they will not fix anything. Once the inspection is done, you take it as-is or you back out. Sometimes there is a dollar amount fixed to it.

Theoretically the inspection can come back clean but that rarely happens; I have posted before that I think home inspections are a waste of money. But in this case it may be they buyer's 'cost' to get out of the contract.

He sounds like he wants to pursue House #2 pronto, but that will have to wait because until Contract #1 is canceled (for whatever reason). No bank is going to accept a mortgage application on House #2 if House #1's contract is still in force And often, the terms of the contract require the buyers to make an application for the loan within X days, often a short time span, maybe even before an inspection can be done on House #1.

I'm not judging the guy over trying to get out of House #1, but he needs to be cautious before proceeding to House #2.

I hope he posts and tells us what happens.

Occifer · 08-09-2014, 10:23 AM

Have you actually signed the contract, or has the seller just agreed to your offer? If the contract hasn't been drawn up and signed, all that could really happen if you back out is making some people mad. I can't imagine your Realtor going out and looking at another property with your wife if the Realtor felt that you were somehow locked in to the property you made the offer on.

If you actually have signed the contract, you need to read it very carefully and look at the terms. Even if you haven't provided earnest money yet, if the contract calls for it then the seller may be able to take legal action and get it from you if you back out of the contract. Also, depending on the contract, not liking what the home inspector finds isn't a catch-all way to get out of the contract. There's a good faith element there. If the inspector finds that there is some loose moulding around door frames and a faucet needs to be replaced, that may not be reason enough to cancel the entire contract--especially if the seller offers to fix them. Major damage or disputed findings would be a reason to cancel the contract.

You definitely need to speak with your Realtor and you may also want to get an opinion from a real estate attorney. Reviewing the contract with an attorney should only cost you a couple hundred dollars, which is probably worth it in the long run. It's likely that the seller will just forget about the whole thing and move on so someone else can have the opportunity to buy the property, but you never know.