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I am right at closing for a home purchase. I am supposed to…

Hello, I am right...

Hello, I am right at closing for a home purchase. I am supposed to close today. If I cancel the purchase at this point do I have any liability for anything besides losing my earnest money?

Lawyer's Assistant: What steps have you taken so far? Have you prepared or filed any paperwork?

Yes submitting cancellation today

Lawyer's Assistant: Where is the home located?

El Mirage, AZ

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No thank you

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Answered in 2 minutes by:
5/14/2018
Lori
Lori, Lawyer
Category: Real Estate Law
Satisfied Customers: 2,420
Experience: Real Estate Attorney with over 25 years experience
Verified

Hello. Let me see if I can assist. Generally, the only risk of not closing as a buyer is that you will lose the earnest money deposit that you put up with the escrow agent. There may be fees that the title company has incurred for the closing (title work, survey, etc.) that you may need to reimburse the title company or the lender (if you have financing) if you signed a document agreeing to reimburse for out of pocket costs if it does not close.

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Customer reply replied 3 months ago
Thank you. I want to verify that the Seller cannot come after me for any expenses incurred by the house not closing. Moving costs, additional mortgage that will be paid by them, repair costs from the BINSR, etc.

G​enerally, no. Be sure to check the contract. Most contracts just have the earnest money deposit as being paid to the seller for taking the house off the market, etc. That is in place of any damages they may have. That is why the contract has the earnest money deposit (since the seller's damages are usually not quantifiable). It would be very unusual for your contract to provide for damages to the seller if you default.

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Customer reply replied 3 months ago
you have. Thank you.

You are welcome.

Please remember to accept my response and post a positive rating so I get credit.

Lori
Lori, Lawyer
Category: Real Estate Law
Satisfied Customers: 2,420
Experience: Real Estate Attorney with over 25 years experience
Verified
Lori and 87 other Real Estate Law Specialists are ready to help you
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Customer reply replied 3 months ago
On the title documents it says, a month other things that the undersigned agree to pay all charges including cancelling fees.So, can the Title company charge me for cancelling right before closing, and can you give me an idea of what those charges might be, because they are not stated.
Customer reply replied 3 months ago
I meant “among” other things

As I mentioned above, it can be the survey order, title searches, liens searches with the municipalities (Water and sewer, for example).

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Customer reply replied 3 months ago
ball park, what can those costs be?
Customer reply replied 3 months ago
As far as amounts? Thoudands, hundred, etc?
Customer reply replied 3 months ago
Sorry for the typos on the move

hundreds. approx. $125 for title search, $100 for lien search, couple of hundred dollars for the survey. Probably around $400 or $500.

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Customer reply replied 3 months ago
Ok, thank you very much.
You are welcome.
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Customer reply replied 3 months ago
I did rate you.
Thanks so much
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Customer reply replied 3 months ago
I’ve been threatened with being sued by the sellers. They said if I cancel they will go after all of their expenses
Customer reply replied 3 months ago
the brokerage said they will go after whatever they can
Customer reply replied 3 months ago
The sellers have put money on a new lot. They didn’t need to sell this house. Their purc

T​hey are just threatening to get you to close. Seller cannot get deposit and then damages. That is the reason the deposit provision is in there. I would recommend making demand for your deposit and not offer to pay any expenses. THey will eventually settle with you. The are being pigs trying to get everything.

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Customer reply replied 3 months ago
But anyone can sue anyone for anything at any time correct? So if they filed a lawsuit outside of the real estate contract what is the likely hold they could win a lawsuit if they sued for any costs incurred from not closing
Customer reply replied 3 months ago
I meant likelihood
Customer reply replied 3 months ago
Because I’m assuming they would sue for their legs expenses to be paid as well if they won
Customer reply replied 3 months ago
legal expenses
Customer reply replied 3 months ago
what i mean by any costs incurred is moving costs. Repairs they performed and paid for that were on the BINSR.Their time and effort, additional mortgage they will now have to pay that they were not expecting to hvs to pay. Anything everything they can think of.

Y​es, anyone can sue is true. They would have to prove and show damages as a result of you not closing. However, they have a duty to mitigate their damages (in other words, get a new buyer ASAP). They can try to recover legal expenses - only if they are allowed under the contract.

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Customer reply replied 3 months ago
Ok, and if they can’t get another buyer, and they can prove the damages, which I don’t know if they can, then what is the likelihood they could win
Customer reply replied 3 months ago
I really appreciate you keeping this conversation going, and still responding
Customer reply replied 3 months ago
The mortgage part would be easy to prove correct? I mean, bacially they sell they didn’t sell the house, so they still have to pay the mortgage

I​t is actually not easy to prove their damages. They may or may not get a month or two of mortgage payments. The law requires them to take active steps to market and sell the property. They cannot sit back and just sue you for the damages. They could recover any out of pocket costs incurred to close - maybe reasonable moving expenses and maybe the broker fees (if the seller is forced to pay the broker for the sale). The broker may not come after them because of the next sale of the house - broker will be paid in full.

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Customer reply replied 3 months ago
Very interesting ok. Thank you.
Customer reply replied 3 months ago
One other question I missed something you said. You said they will settle with me eventually.I offered to come to some sort of agreement, and what would be reasonable to make this better with them. They said they would make no deals or negotiations. They will sue, and that is it

People usually say that at the beginning. However, when the suit is filed and you go to mediation or move along in the litigation process -settlement is more palatable.

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Customer reply replied 3 months ago
Ok. So I spoke to an attorneyon the phone. He said my liability is for the cost of remarketing the house.The difference in the sale price if It sells for less.Also their legs costs and court feesHe said it’s oretty easy. I am in breach of contract, and they would most likely get those damages.
Customer reply replied 3 months ago
Also any difference in closing costs if they had to pay more

W​hat does your contract say? Generally, the deposit is the only damages allowed. If suit for damages is allowed under the contract, the seller will need to hire a real estate expert as to the value of the home and the sale price of the new buyer. They cannot just sell to the next buyer for a low ball amount and sue you for the difference.

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Customer reply replied 3 months ago
Are you familiar with the standard Arizona purchase contract and it’s normal language?

I​f your contract has this provision:

Breach: In the event of a breach of Contract, the non-breaching party may cancel this Contract and/or proceed against the breaching party in any claim or remedy that the non-breaching party may have in law or equity, subject to the Alternative Dispute Resolution obligations set forth herein. In the case of the Seller, because it would be difficult to fix actual damages in the event of Buyer’s breach, the Earnest Money may be deemed a reasonable estimate of damages and Seller may, at Seller’s option, accept the Earnest Money as Seller’s sole right to damages; and in the event of Buyer’s breach arising from Buyer’s failure to deliver the notice required by Section 2b, or Buyer’s inability to obtain loan approval due to the waiver of the appraisal contingency pursuant to Section 2m, Seller shall exercise this option and accept the Earnest Money as Seller’s sole right to damages​.

Seller's damages are difficult to quantify - so Seller can accept just the Earnest Money Deposit as Seller's sole damages. You will need to argue that you relied on that provision in entering into the contract to force the seller to take the deposit (and nothing else).

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Customer reply replied 3 months ago
if my contract says that the only damages are earnest money
Customer reply replied 3 months ago
Would it say something different if they can take other legal action? Or would it just not have that clause?
Customer reply replied 3 months ago
The way I read that clause is they can actually take legal action or take earnest money. As I reading that correct, or not?

If you contract says that -- the Seller May (not must) accept the deposit as his damages.

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Customer reply replied 3 months ago
Ok, and if it does not have that clause then they can sue?

Correct.

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Customer reply replied 3 months ago
I need assurance that even if I have that clause and they tried to sue that it would be thrown out because the judge would site that clause.

You will need to argue that the damages cannot be quantified and are very difficult to do so - which is why that clause is there. You will need to argue that you relied on that provision in entering into the contract to force the seller to take the deposit (and nothing else). ​ You are going to have to play hardball with them to get them to back down and to just take the deposit.

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Customer reply replied 3 months ago
I will need an attorney

Y​es, since they are not being reasonable and are digging in their heels and refusing to negotiate. Be sure to make a demand for the deposit from the escrow agent so the sellers don't get that. They will have to fight you for anything if they won't try to be reasonable and settle.

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Customer reply replied 3 months ago
Ok thank you. Is it ok if I reach out with any other questions. I can pay again if necessary, but you have been very nice and helpful.

Sure. Feel free to post a new question on JustAnswer if you have any additional questions.

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Customer reply replied 3 months ago
if you can refer me to any attorneys in AZ, or if you practice in AZ the. I would retain you.
Customer reply replied 3 months ago
If I can ask one more thing. If they keep my earnest money by default are they accepting the earnest money damages by the breach clause? My contract does have it by the way.

They may try to claim the deposit and then sue for damages. You need to make a demand on the escrow agent for the deposit so that they get nothing by default. Certainly if they make a claim to the deposit - you can argue that they have chosen that as their only remedy.

For AZ attorney, I recommend you see a referral from the AZ Bar Association:

https://azbar.legalserviceslink.com/

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Customer reply replied 3 months ago
Thank you
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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

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