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Ask Dave Kennett Your Own Question

Dave Kennett
Dave Kennett, Lawyer
Category: Real Estate Law
Satisfied Customers: 27686
Experience:  25 years experience
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Need to get out of selling contract

Resolved Question:

I sold my house, and 12 hours later found out I didn't qualify for a new home (even though I was verbally told I did qualify the day before). Originally I had asked the agent to protect me in case of this, but the buyer declined and took took out my protection in the counter offer, but kept my protecting them in the contract. I informed them immediately 12 hours later and asked to cancel the sale immediately, they had not even opened escrow yet. It is now 5 days later - they opened escrow and are not releasing me from the contract. I am a single mom and have written of the hardship this would cause our family. I really can't sell and have no idea how to stop this. Julie - Scottsdale AZ
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Dave Kennett replied 1 year ago.
-Could you explain your situation a little more?
Did you sign the counter offer?
What exactly was taken out of the original contract?
Customer: replied 1 year ago.
The buyers agent countered that the sale was not contingent on my financing and my agent did not advise me that I could counter back. I signed the counter offer where the agent took out my protection. Protection taken out was continent on my financing for new home.
Customer: replied 1 year ago.
RE: Request for Recession
Property Address: 11664 N. 93rd Place
Scottsdale, Az 85260
Buyer: Washburn, Danielle
Seller: Hallmark, Julie
Escrow No.: 503625

Dear Ms. Washburn:


I am the seller for the property of 11664 N. 93rd Place, Scottsdale, AZ 85260. I am writing to kindly request that we cancel the sale of my home. After countless hours of desperately and thoroughly probing each and every avenue that I could to qualify for the purchase of my new home located at 7011 East Friess Drive, Scottsdale, Arizona 85254, I am utterly devastated by the fact that I am unable to qualify for the necessary funding that would allow me to proceed with the purchase.

Due to circumstances beyond my control, I was utterly floored when advised by my lender that I did not qualify for the requisite loan. In a last ditch effort to obtain the funds, I contacted my parents who graciously agreed to serve as co-signers on the loan however, this too proved fruitless as they likewise failed to meet the necessary qualification requirements. In fact, prior to my signing the purchase contract for 93rd Place, I was informed by my lender that I could qualify with the help of my parents co-signing and as a result of my impression, I executed the purchase contract 93rd Place. Unfortunately, the following morning my lender called and said my parent’s tax returns showed unexpected business losses so the numbers precluded the funding from moving forward.

Please understand that I am a single mother with no family in Arizona and if the sale of our home goes through, my son and I would suffer grave hardship as we literally would have no place to reside due to these unforeseen circumstances and my son's father and his school district are close in vicinity to our home which compounds an already untenable situation as we need to stay in this area as a result. Also note that I asked my realtor to insert a clause into our contract that conditioned the sale of same based upon my attainment of requisite financing as I did not have firm confirmation surrounding this issue.

It must be stated that I also tried everything I could to notify all party's of a problem within 24 hours of signing the contract concerning the sale of my home because I didn't want any further hardship for anyone involved. At that time my real estate agent notified your agent of the situation and where escrow had yet to be opened. Despite this notification, escrow opened later that afternoon. I would hate for this go further than it needs to go and I sincerely XXXXX XXXXX any inconveniences caused and kindly request that the above referenced purchase contact be canceled immediately. I await your reply.

Thank you for your time and consideration.




XXXXX XXXXXmark

h

hallmark interior design llc


Expert:  Dave Kennett replied 1 year ago.
Dear JACUSTOMER - This is an obvious contract problem and I can't tell you that you can breach the contract because of some verbal promise that wasn't kept by a lender for financing. The only option you have, if you can't get the buyer to agree to cancel the contract, is to breach the contract yourself and refuse to close the deal. The buyer would then be forced to file a suit for specific performance or for the loss of the value of the deal if they have to purchase a similar property for more money. You would be taking a risk of being sued by the Realtor for the commission as well as by the buyer but if the Realtor knew of the condition of the sale and allowed this to be taken out of the counter offer then the Realtor would be in a weak position to file a suit against you for his or her negligence in allowing the counter offer to change without informing you. No one can force you to complete the deal unless they file a suit and get a court order but anytime you breach a contract you are leaving yourself open for legal action by the other party. It's not a crime to breach a contract but there can be civil suit consequences. In this case I would argue that everyone knew of your contingency up front and that there was not a "meeting of the minds" in the counter offer. It's the only way I know of for you to not sell the property if the buyer refuses to agree. The Realtor certainly knew the terms and if the buyer removed them then he or she knew them as well. I see nothing wrong with your letter but it legally it has no significance as to getting out of the contract. You can try but if all else fails then all you can do is refuse to complete the deal and see if a suit is filed. Many times a buyer will simply take back their deposit or earnest money and look for another property rather than spending money to file a suit. You may still have to deal with the Realtor but, as I said, the Realtor knew or should have known about the contingency being very important to you.
Dave Kennett, Lawyer
Category: Real Estate Law
Satisfied Customers: 27686
Experience: 25 years experience
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