Expert: Karyn Foley - 6/7/2007

Question
I signed a contract on 5/26/07 to buy a new home from Pulte Homes in Maryland. I am now regretting my decision and  looking for a way to break the contract. I'm supposed to settle on the house in a few weeks. Is there any possible way to break the contract without losing my $15,000 deposit? Is my best hope to ask Pulte to voluntarily allow me to break the contract and return my deposit? There is a financing contingency but I won't have any issues obtaining financing.  

Answer
Dear David:  You have a binding contract, and I do not have a copy of it with reference to your contingencies.  It may well cost you your deposit, as sellers have the right to have a buyer perform, as you have the right to have the seller perform.  Breaching a contract in a seller's market might have been very acceptable in that the developer could be able to turn around and sell it to the next buyer for more money, thus not having any losses.  It is not the same market now.  The developer may suffer losses (meaning money) and will seek damages from the buyer (you).  There are two choices of how to do this.  The first is to get legal advice from a real estate attorney.  As a real estate agent, we cannot offer legal suggestions as it would be considered "practicing law without a license".  The attorney can look at the contract and see if there are any clauses that may allow you to withdraw without financial penalties.  The second idea might be to sit down and be candid with the developer, and see what his position is.  If you do that, I would not get involved in discussing your reasons, just tell the developer that you wish to withdraw.  If you do option two first, then you could feel him out and see where he stands on the situation.  Then, if it is not what you want to hear and you think you may have money to pay out, then you could consult the attorney.  Why would you wish to back out?  You just made the purchase.  Another question would be when is the house going to be ready for your occupancy?  You should have an inspection contingency, if you do, perhaps the attorney could find something in your inspection that woud have merit allowing you to be able to not accept something in the inspection report.  You cannot force a buyer to buy, but you can enforce a binding contract unless some new and disturbing fact has some forward.  This fact would have to impact a buyer's decision to buy a particular house.  It has to be an item that a reasonable buyer might have not made the decision to buy the house had this fact been known originally.  I can sympathize with you that you perhaps made a too hasty decision when you entered into your agreement, but I have a tough time with people who do not understand that their hasty bad decision can have a serious and negative impact upon another person.  I have less feelings for the developer than I would have for a family who might have been the seller.  But, you made a mistake and are expecting perhaps not to have to pay for it.  I hope that the home was purchased in a desirable neighborhood that has buyers waiting to buy it in your stead.  Perhaps then, the developer may allow you to withdraw if he would not sustain any financial damages.  I wish you good luck in working things out, but strongly suggest you think this out again.  Buyer's remorse is very common.  You may change your mind yet again and recognized the wonderful qualities in the home that made you excited enough to buy it originally.  Take a few moments and calm down, and make certain what it is you truly want to do.  I would hate to have you back out, and then regret that decision.  Please let me know what happens, and if I can answer any more questions.  Karyn Foley