Once I accept an offer on my house, is there any way that I can still back out of the sale? If I can, what would the repercussions be?
We want to make sure that our offer is accepted on a foreclosed house before we sell our own house, but the bank is taking a while to respond to us. Meanwhile, I have an offer on my house that I have to respond to, and I don’t want to lose this buyer if our offer does go through with the bank.
Complicated enough?
Thanks for any advice/help.
IANAL, but it is always possible to conditionally accept an offer, e.g., “We will sell you the house at $x,000 provided our offer to buy the other house at $y,000 is accepted with 30 days.” That is, of course, a counter-offer, and can be accepted or rejected by the person offering to buy your house.
You can put a clause in the contract to sell your house like “Sale is contingent upon acceptance of the seller’s offer to purchase the property located at 123 Main St; Anytown Your State.” You should also tell the buyer that this clause is part of the contract, and make sure they clearly understand it before you sign the contract.
And that’s why we still employ Realtors.
IANAR and IANAL but I agree that these two simulposts are the right answer for you–structure the contract to take your risk into account.
More generically, though, if you simply back out of a contract you are liable to be sued for damages, or could be sued for specific performance. That is, if a buyer could demonstrate they suffered a financial loss as the result of the inability to buy your home, then they could possibly win damages in court. In some cases, the buyer could request the court force you to sell the house, not allowing you to back out of the sale.
I am a lawyer. Without knowing the jurisdiction that the OP lives in, I think advice such as with respect to suit for specific performance and its availability as a remedy as it relates to real property needs to be very carefully given. Just as with the ability for a creditor to collect a deficiency on a mortgagor’s default where it is the mortgagor’s primary residence, what remedies are available where you live, are not available everywhere.
The poster who suggested the buyer of your place could pursue damages is correct - IANAL but there’s a Washington Post columnist who discusses the legalities of real estate and the situation described in the OP has specifically been addressed there - the buyer of the OP’s house could sue, up to and including “specific performance” which basically would order the seller to sell the house as agreed).
This is, assuming you’re in the US; obviously the details of what the seller could do will vary by the state you’re living in. And if you’re outside the US, I don’t know what the laws are.
My advice? Depending on the housing market in your area, if sales are hard to come by, I’d personally be more willing to risk having to live in short-term rental housing, than I would be to risk losing the sale.
You could also have your agent call the foreclosure’s bank and remind them that they have a firm offer on the table, which will go away immediately if they don’t sign off on the sale. Could you afford to sweeten the offer by, say, 5K if you get that immediate answer? The bank is after all eager to preserve its investment as well as it can, and cash (guaranteed) in hand now is worth a bit more cash (uncertain) in the future.
Well, I should hear from the bank in the next day or two but the offer on my house was expiring today. I asked the realtor how I could handle it and he said basically, “just sell your house and worry about the rest later.” I asked him if I could extend the date the offer expired for a week or so and he said no. He never offered the suggestion of this contingency that Giles and Annie suggested and for some reason I hadn’t thought of it. I hate realtors. Anyway, thank god for the Straight Dope! I wrote the contingency exactly as Annie suggested it and put an expiration date on it. Buyer seems amenable to this counter-offer but hasn’t actually seen or signed it yet. Gah, did I mention that I hate realtors? Why didn’t he just tell me that instead of making me sweat and scramble around.
You don’t hate realtors, you hate bad realtors. Next time get a good one.
Your statement is correct. However, my post was not “advice.” I was not advising the OP what to do, thus all the “could” and “possibly” in my post.
samm, before you say you hate “realtors” make sure your agent is a REALTOR. Some aren’t. Then if he isn’t the broker in his office, explain the situation to his Broker. Whenever any agent is fined, the Broker and the office get hit with identical fines (at least in New Jersey). It keeps them on their toes and doing things right.
Anyone who can pass the state licensing test can be called a real estate agent. REALTORS are hold to a strict code of ethnics, and have to work in the best interests of their customers. It sounds like your agent is working solely for the commission, which is not the way to do business.
Strict code of ethics. :smack: Basing any real estate dealings on “ethnics” is against our code of ethics!
Now let me go get some coffee…
BTW, our office got hit with a similar situation once, and the seller went to the Commission. When the Commission’s agent came into our office, we gave him a stack of papers two feet high with the terms of the sale clearly spelled out and signed by the seller. It took the guy five minutes to realize the deal was clearly stated in writing, and the seller had signed it. He left, and we never heard from him again.
Just popping in to go off on a tangent and say I absolutely LOVE our realtor (sorry Annie, not gonna capitalize the whole thing). He is absolutely and completely earning every penny of his commission plus he’s fun to be around when we are looking at places.
We close in two weeks and when we sell, you better believe we’ll list with him.
And just as a general observation, don’t necessarily expect the foreclosing bank to get back to you quickly on your offer, whether it’s sweetened or no. They could sit on it for months, even if you’re expecting an answer in days. I’ve been down a similar road, though with a short sale rather than an actual foreclosure, and it took about five months.
Whoops!!
And that’s one that spellcheck wouldn’t have caught (a colleague of mine once nearly sent out a document to a client at the US Department of Housing and Urban Development… referring to “pubic” housing…).
/hijack
Realtors, REALTORS, and real estate agents don’t know anything about contracts, except that they don’t get paid if they don’t get you to sign the contract. The OP should get a lawyer to handle the contract.
Realtors (of all stripes) find people to buy houses. They shouldn’t be involved in the process beyond the point where the seller accepts an offer from a buyer. At that point, involve a lawyer. The realtor is still good for things like getting coffee at the closing. He’s really just there to pick up his commission check, so make him work for it a little.
In New Jersey, REALTORS and real estate agents are trained in writing real estate contracts. We know how to do a basic contract and negotiate to get it signed. Then the attorneys step in and take over.
Realtors price houses, get listings signed, write contracts, negotiate contracts, keep in touch with all parties, often take care of getting the Certificate of Occupancy from the City, and get the commission check that they earn. Anyone who thinks it’s nothing but showing a house and getting a contract signed knows very little about the business.
Yeah… I hear what you’re saying, but I don’t know how it’s possible to find one single realtor in the world who is actually interested in me getting the best possible outcome rather than being interested in making the sale go through under any circumstances just so they will receive their commission. So far, of the million and one coworkers/friends/acquaintances surveyed, no one has had any experience with a “good” realtor.
I doubt that seriously.
You’re right, they are probably all lying to me and don’t want me to find a good realtor because they secretly hate me and want me to lose money.