Expert: liznarr - 9/30/2009

Question
We have just signed documents to sell our home.  We received news within 48 hours of signing that my husband was laid off suddenly.  He is the breadwinner.  It was completely out of the blue.  Now all we have is our house and we would like it back. We have not signed any contract to buy another house. The buyer doesn't want the house as much as the 8,000 government rebate for first time homebuyers.  They will only give it back if they can find another house within the time limit of gov rebate. We dont even know if they are really looking.  Any ideas to get out of this agreement and get our home back?

Answer
Hi Krista,

I am so very sorry to hear about your situation.  This is a typical case of, ‘Just because it is legal, does NOT make it moral or ethical.’

I would consult with a good attorney in your area to review your Contract of Sale and look for a way out; but other than that, your best option is to appeal to the sense of decency of the Purchasers.  Involve both real estate agents, also, to see if they will try to help you.  

Since it is so soon after entering into the Contract of Sale, these Purchasers should not have much in the way of “damages” at this point, which is usually what people will go after if litigation is involved if you were to refuse to sell.  Hopefully, they could find another property and still take advantage of the $8,000 credit.  If not, the $8,000 credit could be part of their damages if they were to miss-out on it.

A properly-executed Contract of Sale is a legally-binding document.  Given that, you should read your Contract very carefully now and look for “outs,” or breaches by the Purchaser which would entitle you to cancel/void the contract such as earnest money and loan application.  Depending on your Contract language, there could be others that might apply this early in the game.

Contracts in my area state that a purchaser must make loan application within a certain period of time (generally five business days, but yours could be different).  If a Purchaser does not make timely loan application, they are considered to have breached the Contract, an action for which you could cancel the Contract.  

If you try this route, insist that the lender provide you with ALL documentation the Purchasers should have provided if there is a time period in your Contract, making sure that Purchasers did make a complete and TIMELY application for the loan.  If Purchasers were required to pay for a credit report as part of the loan application process, ask for a copy of their cancelled check in payment of that.  I would not bring this topic up with the Purchaser or lender until the time period has expired; otherwise, that would prompt the Purchaser to make sure they have dotted all their “I’s” and crossed all their “T’s.”

Also check on the earnest money the Purchasers agreed to put up as stated in your Contract.  In my state, earnest money in the form of a check MUST be deposited into a broker’s trust account within 48 business hours after acceptance.  If the Purchasers did not timely give their earnest money to the broker as required by the Contract, that could also be a breach.  The fact, however, that a broker might not deposit it timely should not affect the Purchaser.

If you do not find any outs early in the game, if the Purchasers do a home inspection and ask you to make any repairs, refuse to contribute anything further, assuming you are not required to make any repairs per the Contract.  Home inspection repair items are generally negotiable items that a Seller will usually be agreeable to, in an effort to SELL their home – which is NOT what you want to do now.

If you simply refuse to sell your home, you could be subject to a lawsuit by the Purchasers.  Whether or not they would pursue that avenue is anyone’s guess.  Again, I would consult with a good attorney who might be sympathetic and really try to help you determine if you have any legal outs, per your Contract of Sale.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth