House Contract Question

[Maikeru-sama]

Today, I was informed that the seller lost his job while on route to show two contractors the property to get a bid. I spoke with the seller directly and he stated he would not like to sell the house because of it. After doing some thinking, I have a feeling the seller is not being truthful.


1. Three weeks ago the Seller’s wife let my real estate agent know that she didn’t like the new property they just closed on that it had a snake in it and was far from move in ready.

2. Last week, the Seller asks if we had a problem with them staying in the property after closing for 2-3 months so they could get the new house up to speed. I was told the Seller's wife was putting major pressure on the seller to get the house up to speed.

3. Today was the day the option period ends and coincidentally the Seller loses his job.

4. The way he and his wife were acting was very suspicious when I spoke with them.

I suspect that they just want to stay in the house as long as they want so they can get the other house ready and then try to re-sale their current one.

I will be getting all my money back that I spent but if it turns out the seller didnt lose his job, could I possibly get the house?

 

[Hostile]

I tried to call you on your cell. If you still have my cell #, call me.

Long story short, if they have accepted your offer they cannot change their mind and keep the house without immediate compensation to you.

 

[Maikeru-sama]

I tried to call you on your cell. If you still have my cell #, call me.

Long story short, if they have accepted your offer they cannot change their mind and keep the house without immediate compensation to you.

Check your PM, my number changed a few months ago.

 

[Bigdog]

Hos is right. if they signed a contract then they have to abide by that contract. We put a bid on a house and it was accepted but the sellers wanted to have 30 days to find a new house. The 30 days was up and we had a choice to resubmit another 30 days or terminate the contract and look for another house. We chose the latter. It what was ironic was the house that we bought, the sleers of the first house wanted it too.

 

[poke]

i think you might could get the house....something about specific performance in texas.
the question is would it be worth it ? im pretty sure to get the house you will need a real estate lawyer and then go through the court system.
in the meantime where do you and all your stuff go ?
if i could get ALL my money back i would probably just move on and look for another house.
this is just my opinion based on what little i have heard or read about things like this.
a consultation with an attorney would probably be money well spent at this point.
hard to make good decisions without all the information.

 

[Maikeru-sama]

My lease in my apartment doesn't end until the end of September, so I have a place to stay.

I spoke with my real estate agent (he is in indy for a family reunion) and I told him that before we agree to terminate this contract, I want verifiable proof that the Seller lost his job. I lost my job in July of last year and you sign papers when you are laid off and get copies of those papers, so it should be easy to provide proof. If the Seller can prove he lost his job, I may be willing to forgive the money I spent on an Inspection and Option money.

However, if he cannot prove that he lost his job, I am going after the house.

I believe that is fair.

Termination Option

Paragraph 23 sets forth the Option Fee in the Contract. This is a fee paid by the buyer to the seller in exchange for the unconditional right to terminate the contract during the option period. The buyer is not required to purchase this option. However, if the buyer does purchase the Option Fee, and it is submitted within two days of the date the contract is signed, then the buyer will have the unrestricted right to terminate the Contract by giving notice of termination to the seller within the specified option period.

For instance, suppose the seller refuses to make specific repairs called for by the buyer's inspector. The buyer may be unwilling to purchase the house if the repairs are not made by the seller. The buyer's option fee will provide the buyer with the unconditional right to terminate the contract within the specified option period. Additionally, the seller must understand that while paragraph 23 can provide the buyer with an unrestricted right to terminate the Contract, the seller will not have that same right.

link

After looking over the REAL contract, it is clear that he cannot back out of the contract without my consent. That is why he told me at the house yesterday that "We would rather not sell the house now".

Again, I lost my job last year and I can sympathize with the guy but I have some suspicions that he may not be being honest with me. We have put alot of time into this contract, I have not looked for a house in almost a month, I have contractors that are ready roll in and do enhancements and I know for a fact if I try to lock a loan today, I can kiss 5% goodbye, so I believe it is at least worth it to make sure the seller is being truthful.

 

[burmafrd]

Sounds fishy. And the verification of job loss is pretty easy to come by. If you really want that house then you might have to bite the bullet. Comes down to how much you want it.

 

[Maikeru-sama]

I agree burm.

I will feel bad if it turns out the guy did lose his job, but I told my real estate agent that I will be willing to not make him pay me for the Inspection and Option Money if he can prove he lost his job and I will let him keep the house. If I lost my job, I would take that deal so I wouldnt have to pay $400 to the buyer.

I REALLY want the house. I moved into that house mentally several weeks ago.

The Seller's wife has been giving out too many warning signs for me to simply not look into it.

 

[theogt]

The seller typically does NOT have the right to terminate. You have to agree to terminate. As the language you posted shows, your contract doesn't appear to give the seller the right to terminate.

Contracts for real estate are subject to "specific performance," which is a legal term basically meaning that you can get the house no matter what. So the compensation you would be entitled to is the property, not some other form of payment unless you agree to such payment.

None of this is legal advice. Just posting observations.

Personally, I don't see how he benefits from having two houses after he lost his job. If I just lost my job, I wouldn't want two mortgages.

 

[Hostile]

The seller typically does NOT have the right to terminate. You have to agree to terminate. As the language you posted shows, your contract doesn't appear to give the seller the right to terminate.

Contracts for real estate are subject to "specific performance," which is a legal term basically meaning that you can get the house no matter what. So the compensation you would be entitled to is the property, not some other form of payment unless you agree to such payment.

None of this is legal advice. Just posting observations.

Personally, I don't see how he benefits from having two houses after he lost his job. If I just lost my job, I wouldn't want two mortgages.

I told him this on the phone last night. The seller's reasons are not making sense at all. I think Mike is getting the shaft and I wouldn't stand for it. Sue for specific performance if you have to or demand compensation for your good faith efforts plus remuneration for all costs you have already incurred.

 

[theogt]

I told him this on the phone last night. The seller's reasons are not making sense at all. I think Mike is getting the shaft and I wouldn't stand for it. Sue for specific performance if you have to or demand compensation for your good faith efforts plus remuneration for all costs you have already incurred.

What I would do is take the difference between the 5% interest he locked in and whatever the current rate is now (probably closer to 6%) and discount it over the 30 year mortgage and demand that for termination payment. That would be thousands of dollars.

 

[Hostile]

What I would do is take the difference between the 5% interest he locked in and whatever the current rate is now (probably closer to 6%) and discount it over the 30 year mortgage and demand that for termination payment. That would be thousands of dollars.

Exactly. The seller is hurting Mike because of the rising Interest rates since he made a good faith offer and it was accepted.

Honestly, this is nonsense on the part of the seller.

 

[Cajuncowboy]

You have a binding legal contract. It's their problem. Unless you can't get the financing, the house is yours.

 

[Maikeru-sama]

Thanks fellas.

Okay, let me ask you guys something that has been in the back of my head.

When I knocked on the Seller's door yesterday to show the property to two Contractors, the Seller and his wife came out and this is when he told me he got laid off.

When I asked him did he not want to sell, he said "No, we would not like to sell the house". I said okay and started walking away and then he started apologizing again and he did this several times each time I tried to leave (3 times to be exact).

At one point, he said that he would pay me all the money that I spent on trying to get the house and just to SHUT the guy up and being tired of him being so apologetic, I casually said, "That's fine" and we all walked away.

Does the seller now have a verbal agreement from me that we would terminate the contract? Of course, I could lie and claim I never said it, but that is not how I do things.

 

[Maikeru-sama]

Theo, the way it was explained to me was that the Seller bought a new house that is $100,000 more than the one he currently owns. He used $40,000 from his retirement account to make a down payment.

Theorhetically, if he did get laid off, he would want to get rid of the house that costs the most a month, which would obviously be the new place.

 

[theogt]

Okay, let me ask you guys something that has been in the back of my head.

When I knocked on the Seller's door yesterday to show the property to two Contractors, the Seller and his wife came out and this is when he told me he got laid off.

When I asked him did he not want to sell, he said "No, we would not like to sell the house". I said okay and started walking away and then he started apologizing again and he did this several times each time I tried to leave (3 times to be exact).

At one point, he said that he would pay me all the money that I spent on trying to get the house and just to SHUT the guy up and being tired of him being so apologetic, I casually said, "That's fine" and we all walked away.

Does the seller now have a verbal agreement from me that we would terminate the contract? Of course, I could lie and claim I never said it, but that is not how I do things.

Again, this is not legal advice. I'm just summarizing otherwise well-known legal concepts.

Contracts related to real property cannot be verbal, rather they must be in writing. To cancel the contract for sale, one would typically have to cancel the contract in writing. This is often referred to as "the Statute of Frauds."

 

[Maikeru-sama]

Just spoke with my real estate agent and he said everything in Real Estate is done in writting and it didn't matter what I said to the Seller yesterday.

He said, to terminate a contract, the Seller's Real Estate Agent has to send over the contract stating that we are terminating the contract and I have to sign it.

Not to get religious, but I want to make sure I am not going after a guy who just lost his job and thus getting on the wrong side of the man upstairs. However, I believe that even if he lost his job there are a couple of things:

1) It isn't like he doesnt have a place to go after we close on his old house

2) We are actually HELPING him by taking 1 of 2 mortgages off of his hand and who wouldn't want that.

3) As my Real Estate Agent said, if the shoe was on the other foot, and I lost my job after the Option period was up, the Seller wouldn't let me off the hook.

Theo, I told my Real Estate Agent what you said you would ask for and he said that sounds good for him.

He is currently getting in touch with the Seller's Real Estate Agent and letting her know that we plan on being at the Closing Table July 1st.

 

[theogt]

Ethically speaking, I think you're certainly following the right path here.

 

[peplaw06]

Just to echo what others have already said Mike... it doesn't sound like they're being honest with you. I understand maybe wanting verification, but I don't think ethically/morally that you're doing anything wrong if you feel you're being lied to.

I'm sure they have or had the same option on their new house. They wouldn't be going through with that purchaseif he was in danger of losing his job, or if they're currently in the option period.

 

[Yeagermeister]

Just to echo what others have already said Mike... it doesn't sound like they're being honest with you. I understand maybe wanting verification, but I don't think ethically/morally that you're doing anything wrong if you feel you're being lied to.

I'm sure they have or had the same option on their new house. They wouldn't be going through with that purchaseif he was in danger of losing his job, or if they're currently in the option period.

Good point Pep. I didn't think about that side of it. If he lost his job why isn't he trying to get out of the contract on the other house? Have they already closed on it?