Expert: Jessica Bryan - 6/1/2006

Question
I am under contract to sell my house and I need to terminate the contract for personal reasons. We are several weeks from closing - the buyer has had the home inspection done, but to my knowledge that is the only additional cost incurred.

I feel the need to clear this up with a minimum of hurt feelings and animosity. I am more than willing to give back all earnest money, and part of me says I should make it right by paying for the house inspection as well. I have received the full copy of the inspection and feel I will benefit from it thus I should reimburse the buyer for the inspection.

Could the buyer, their agent, or my agent come back and sue me for anything beyond this? Conceivably what could their damages actually be? Advertising costs?

I don't mind incurring some costs here but I don't want to be sued for thousands of dollars either.

Thanks in advance

Jim

Answer
Dear James;
A contract is a binding legal instrument, but as many attorneys will tell you there is no contract that can't be broken.  If your personal reasons are good enough to prohibit you from selling this home at this time, then I would suggest discussing your reasons with your agent.  Of course, you should reimburse the Buyers for expenses incurred.  This does not mean that they can't and won't ask you for other compensation as well. In a perfect world where every one "plays nice" the Buyers would be understanding and walk away.  However, they could have lost out on another home and perhaps prove that they have been damaged by not being able to buy your home. My suggestion is to write a letter (and make it a good one!) to give to the Buyers or to arrange a face to face meeting with the Buyers and agents.  Discuss your problem and be clear that you want to reimburse the Buyers for their expenses.  If they become unreasonable then you will have to consult an attorney.  Treating this situation with care is important since you want to keep the Buyer's from becoming angry or stubborn. For example, if your reasons for not selling include hardship or illness or even loss of employment, you can certainly make a case for yourself and play on the Buyers' sympathy.  However, if you don't disclose your reasons the Buyers may become suspect of your motives and threaten to sue.  (By the way, before any law suit is filed check your contract and see if there is a mediation or arbitration clause.) Again, start with a frank discussion with your agent and see how that goes.

As for other costs, yes...your agent may ask to be compensated for time, advertising, etc.  If you read your listing contract you will see that you are responsible to pay the agent's fee if they provide you with a ready willing and able buyer. The other agent can also require compensation.  Again, this rarely happens when the situation is extreme and when the Sller is open and honest with the situation.  People are people and they can be surprisingly kind under the right circumstances.  I certainly hope, for your sake that this works!

Good luck and best wishes,
Jessica Bryan
Managing Broker
House to Home Realty Services