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Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 33474
Experience:  30 years of real estate practice experience.
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I am hoping someone can help me. We were in the middle of

Customer Question

I am hoping someone can help me. We were in the middle of buying a new house and selling our current home. Three weeks out from closing, and I just found out that I am likely losing my job. This leaves us unable to purchase our new home, and we need to back out of selling our current home. Our agent included a contingency in our contract that we needed to find a new home and get an agreement on the new place, which we technically have (and are backing out on,) but not that we needed to close on new house. If our buyers force us to sell, we will basically be without a place to live. I'm looking for a lifeline here...does anyone have any advice or suggestions? In all honesty, I'm terrified, and any ideas would be welcome.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Loren replied 1 year ago.

Good afternoon. I am Loren, a licensed attorney, and I look forward to assisting you.

Does either contract contain any limitations on your exposure to liability, such as liquidated damages?

Customer: replied 1 year ago.
No, just says if either defaults, the damaged party can seek equitable damages. I am assuming that the buyer will likely makes us pay for the costs they've paid for appraisal, inspections, etc. And we are waiting to hear if they are willing to let us out of the contract in general. Our concern is also that our buyers are investors who are planning to rent out the house and have a renter lined up. We are just trying to find out if we have any leg to stand on if they push the issue and want to force us to sell.
Expert:  Loren replied 1 year ago.

Thank you for the additional information. I am sorry to hear of your dilemma. I realize how frustrating this is for you and I hope to provide you information which is accurate and useful, even though it may not be the news you were hoping to get.

Expert:  Loren replied 1 year ago.

Unfortunately, the equitable remedy referred to is called "specific performance" and it allows the buyers to sue for breach and ask the court to order you to sell the property to them for the agreed price.

Expert:  Loren replied 1 year ago.

The other side of the transaction (your purchase) may be a bit easier to get out of. Many contracts provide that a seller's sole remedy, if the buyers breach, is to retain the earnest money. While the loss of the deposit may be unpalatable, it is certainly preferable to open ended liability.

So, check and see if your contract contains that provision. That might give some protection to you.

You can also try to negotiate a release with the buyer and seller to terminate the agreements for a lump sum settlement. If this is possible, and you reach terms, make sure to get the settlement agreement in writing so that it is enforceable against the written contracts.

Expert:  Loren replied 1 year ago.

I realize this is probably not the answer you were hoping to receive. Also, please remember that this is not a moral judgement on my part. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's legal position, but accurately reflects their position under the law. I hate it, but it happens and I only ask that you not penalize me with a bad or poor rating for having to deliver less than favorable news.

Expert:  Loren replied 1 year ago.

Did you have further questions? Have I answered your question?

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