Expert: liznarr - 1/23/2007

Question
Hello again, I have one more question to ask.  If I am in the process of closing and the seller puts the house back on the market (which I saw on-line) does that give me the right to pull out of the contract without any penalties?  I had notice that the house was off the market when I had sign the contract a couple of weeks ago and not it is back on the market again and I had not been notified about a release as of yet.  Thanks again for your help and I really appreciate it very much.
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The text above is a follow-up to ...

-----Question-----
I am in the process of closing for a home that I am purchasing.  If I decide not to buy the home, does the seller have the right to sue me?  Thanks for your help in advance
-----Answer-----
Hi Ken,

If you decide not to buy and close on a home you agreed to purchase, the language in your Contract of Sale is what determines whether or not a Seller can sue you.

Since I have not seen your Contract of Sale, I can only give you general information regarding your question.

In the case of a SELLER Breach of Contract, a Purchaser generally can refuse to close without penalty.  Again, however, language in your Contract is what prevails.

If a Purchaser simply decides not to go through with a closing, you could be subject to actions by a Seller as spelled out in your Contract.

If, after checking your Contract for any penalties/actions you might be subject to by a Seller if you do not want to close on this home, my suggestion would be to try and negotiate a graceful exit with the Seller.  You probably would lose your earnest money, but if you otherwise reach an agreement with the Seller to cancel the transaction, just be sure to reduce your agreement to writing and have it properly witnessed to avoid any future “flashback.”

I hope the above is helpful.  Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth


Answer
Ken,

The mere fact that the Seller’s agent may be showing the house as available for sale again would not relieve you of any obligation you have under your Contract of Sale.  You and the Seller are the only parties to your Contract of Sale, not the agent (unless he/she has a deeded interest in the property … which, if this were the case, should have already been disclosed to you).  More simply put, the agent cannot change any of the terms of your Contract; only you and the Seller can do that, and any changes/modifications/termination should be made in writing.

If the agent has this house back on the market again, there should be some type of comments somewhere that any offer would have to be subject to a release of the existing contract.  Otherwise, you could tie the Seller’s house up forever (so to speak) and hold up a sale.  The agent is either inexperienced or playing Russian roulette, or both.  This is not an ethically-acceptable practice for a Realtor (unless there is an agreement to terminate which just has simply not yet been reduced to writing).

If a Release of Contract has not yet been signed, the agent is risking some very bad ill-will with other agents if they show the house and find that it is currently under contract.  The Seller cannot legally enter into a new Contract of Sale with another Buyer until a Release of your Contract has been signed.  

If the Seller entered into another Contract before yours is officially terminated and released, the Seller would have TWO contracts on his property at the SAME time… and it can only be sold ONCE…and the Seller would be inviting litigation by signing a second Contract before yours is terminated, unless the “subject to” wording for a release of the existing contract were included.

Hope this answers your questions.  Write again if you have more.

Regards,
Elizabeth