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I signed a contract to sell my home in pa but the buyer had…

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I signed a contract to...
I signed a contract to sell my home in pa but the buyer had his agent lower the price to fit the appraisal and add an addendum to pay me in cash payments of $25,000 $1000 a month after the sale but it doesn't say what the $25,000 is for and I'm not paying taxes on it I was told this is illegal and after talking to the buyer about it he got a lawyer and threatened to sue me if I don't go threw with the deal I think I want to back out of the deal feel like I will never get the $25000 or get sued if I don't do the deal?
Submitted: 2 years ago.Category: Real Estate Law
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Answered in 5 minutes by:
1/29/2016
Real Estate Lawyer: Richard, Lawyer replied 2 years ago
Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 56,897
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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Good afternoon. My name is ***** ***** I look forward to helping you.

The buyer seems to be structuring it like this to get around his lender requirements. So, what I would do here is respond to them in this manner: I will close with the cash payment obligation, BUT, I will not participate in any conspiracy to commit fraud. So, the $25,000 must be disclosed on the HUD-Closing statement so that it is disclosed to all parties that this $25,000 payment is part of the transaction. Then, no matter what the contract says, I would include the $25,000 as part of the sale price when you file your tax return.

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Customer reply replied 2 years ago
I would like to back out completely i don't want to take the risk of not getting the $25000 or fined for fraud or tax evasion
Can I get sued for backing out?
Real Estate Lawyer: Richard, Lawyer replied 2 years ago

Thanks for following up. Not likely, given the fact they are trying to perpetuate a fraud. Any contract provision requiring you to evade taxation is not going to be enforceable. You can approach this one of two ways. One, you can simply terminate the contract by notifying the buyer of the termination and returning the deposit. Going this route, you would have some risk..that risk being: i) the buyer suing for damages...such as any costs incurred in connection with the purchase of the property and if the contract provides for specific performance, the buyer suing to force you to sell; and ii) if the listing agreement provides for a commission to be earned when a willing and able buyer is found rather than only upon closing, the payment of the commission. But, buyers rarely pursue the specific performance option even if granted in the contract. Two, almost all real estate transactions have issues...inspections, title issues, appraisal, financing, etc. You can simply say no to everything the buyer requests and pretty much make the process so unbearable the buyer terminates. In that case, you would have no liability. In my experience. buyers rarely pursue suits...they are interested in buying a house and don't want to get caught up in time-consuming and expensive litigation. And, it's important to not let the real estate agents try to intimidate you...they are only concerned with getting their commissions and will almost always threaten you with dire consequences in order to scare you into closing.

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