They are trying to back out of our offer and acceptance?

Made a offer on house they accepted and signed a offer and acceptance. Now they say they need more money so they can move out of state. What should I do now?
Additional Details
In Arkansas if that makes a differance.

They are contractually bound to the agreement.

If there is a binding offer then you might be able to force them to sell. You may end up having to hire an attorney to help force them, and of course you won't get them to agree to do any repairs or lower the price if the appraisal comes in low.

If they owe so much that they will have to pay at closing you may not be able to get "blood out of a turnip".

set your closing that is not your problem. You can sue them for backing away

Tell them you will hold them to the terms of the contract and a remedy called specific performance; that said, by going this route you are also tied into the current deal, so if you have an inspection report come back with issues, in a majority of sales contract any additional request on your part for compensation or repair of such issues would be a counter offer allowing the seller to terminate the whole deal and walk away,

"Lack of planning on your part does not constitute an emergency on mine". If the agent wants to take a cut on their commission that is fine but I'm guessing they should have figured their finances out before they accepted your offer.

They either have to go ahead with the sale at the agreed on price OR pay you damages.

An offer to buy real estate and the seller's acceptance of that offer is a legally binding contract. The only way the seller can get out of selling it under the terms of the original offer and acceptance is if there are contingencies in the offer and/or the acceptance paperwork that have not been met.

A contingency is where the buyer or the seller reserves the right to back out of the deal without penalty if certain conditions are not met within a specified time frame. For example, a standard buyer's contingency is that they have 17 days from the seller's submission of the transfer disclosure statement (TDS) to decide whether the buyer still wants to buy the house. One such disclosure might be that the seller knows that a neighbor is going to put on a second story soon that will block the buyer's view. The buyer can then back away from the deal with no penalty or renegotiate a sales price to reflect the lowering of value due to the blocked view.

However, once the buyer signs off on the TDS and the contingency, then they have no recourse and must go through with the deal or incur a penalty.

If there is no documentation that describes a contingency where the seller can back out of the deal if they discover that the profit on the sale is not enough to cover moving out of state, then the seller cannot back out of the current deal without incurring a penalty. This would be in the form of paying all outstanding escrow fees, reimbursing the good faith deposit put down by the buyer, paying a portion or all of the commissions the real estate agents would have received, and some monetary remedy (a few thousand dollars maybe) to the buyer for the inconvenience and hassle, plus any legal costs (like an attorney).

When the offer was made and then accepted, the forms everyone signed should have included a clause that describes what happens if there is any disputes. This is generally in the form of a mediation with an impartial third party who has the legal experience to resolve the matter. And, this decision is final and binding to all parties involved.

If you do not have a real estate agent representing you, that was your first mistake. People always ask, "Why should I get an agent as a buyer?" First, it doesn't cost you anything. The buyer's agent is paid by the seller. Second, he would have already instructed you as to your options in this matter and threatened the seller with mediation if they back out of the current deal.

As it is, your choices are either to contact the real estate board in your state (sometimes your county) to find out how to start the mediation process, or you can negotiate with the seller in allowing you to back out of the deal with no penalty. Or, you can just pay the higher price (not the best option, obviously).

Unfortunately, there are many ways both buyers and sellers can get out of a contract. For example, many buyers will use the "Loan Contingency" to get out of a purchase agreement by making sure their lender denies them for a loan (sabotage)---even if the real reason is something else.

Here is my own opinion...

If you are lucky, the seller will put in writing (even email may work) as to why they are trying to get out of the agreement. If it states "price," you may be able to get your Agent and/or the Listing Agent to use that as ammunition to fight to get their commissions paid. That will let you stay out of the fight and give an incentive to the sellers to just let the transaction go through. Also, most agents are good at putting proper pressure on the seller.

If you decided not to get an agent, you may just want to let it go and find another house. Unless we are talking about 25k or more, it isn't really worth it to try and still force the seller to continue with the agreement. It would be better to find another house or just give them what they want---EVEN THOUGH THE SELLER IS ABSOLUTELY WRONG, A JERK, AND DOES NOT HONOR AGREEMENTS.

If you decide to continue to work with them and give them what they want, have them put something of value into escrow to make sure they will lose it if they try and renegotiate price. If you don't have any Agents involved, call the escrow officer and ask what could be done (cash sounds good).

Unless the seller has a contingency written into the contract stating that they have to be able to secure suitable housing, that is not something that is binding on you.

TDS probably doesn't apply to your situation.

Once the seller signed the offer to purchase, they were committed. They had all sorts of time to figure out what they needed to sell for, and this is not your problem.

They can either:

#1 - Honor the contract as is

#2 - Void the contract, pay you damages, you find a new house

#3 - Void the contract, you sue for specific performance (which you will win) and you get the house

It's that simple.

They cant get more money from you since they already signed a legal binding agreement. They should have thought about that before hand. Ask your agent what happens if they back out.

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.024
Copyright (c) 2011 Financial Crisis Tuesday, May 29, 2012 - Terms of use - Privacy Policy