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RealEstateAnswer, Lawyer
Category: Real Estate Law
Satisfied Customers: 28028
Experience:  10+ years in handling Leases, Landlord-Tenant, Foreclosures,Mortgages, and Eviction cases
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I entered into escrow with the seller of a property in CA.

Customer Question

I entered into escrow with the seller of a property in CA. I had a home inspection done as well as an appraisal. They had a contingency that they purchase another property so they could roll over the profits from one to another. Now the seller is saying they no longer wish to sell the property and plan to rent it out instead. There's no time frame on the time for them to find a home to purchase. They want me to cancel escrow. However, I feel the price for the property is a good one, given how much the market has moved up since we entered into escrow. I've offered to do a lease to own, where 25% of the rent would go toward the down payment and once they found a place we'd end the lease, with a maximum amount of time of 3 years. They said no. What would you recommend for next steps?
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  RealEstateAnswer replied 2 years ago.
Good morning. Can you share with me the exact language that was stated in the contract, in regard to them buying a new home?
Customer: replied 2 years ago.
1031 TAX DEFERRED EXCHANGE: It is understood and agreed between the parties hereto that seller's intent is to effect a tax deferred exchange under IRS code Section 1031 of the Internal Revenue Code. The parties herein therefore agree to fully cooperate, one with the other, in executing whatever documents or amendments which may be required in order to properly effect the tax deferred exchange, at such time as seller has located other property acceptable to seller for the purpose of completing the exchange. Buyer is to be at no expense or liability in cooperating with seller.
Expert:  RealEstateAnswer replied 2 years ago.
The seller would need to have a made a good faith effort to try and find another property to purchase. If they did not, you can always make an argument against them and try and enforce the contract and/or sue them for the breach and damages suffered. There really should have been stronger language, laying out a time frame and other factors which would facilitate the house hunting process and things of that nature. If there is nothing else stated and it simply said the sale is contingent on a new home purchase and they do not buy one and now just want to rent this house out, then there is little to do, since you entered into the contract, knowing what it was contingent upon. If they do not want to sell, they can back out since they did not purchase another property and would need to refund the escrow. I know it is not what you were hoping to hear but you should not have agreed to this contingency and just entered into a straight purchase and sale agreement.
Expert:  RealEstateAnswer replied 2 years ago.
I just wanted to follow up and see if you had any other questions or needed me to clarify something. I am here to help, so please let me know. Thanks!