We recently went into contract with hopes to move in 3 weeks, but the seller is backing out. We received a call from his realtor saying that there he has a pre-payment penalty on his loan and that he has nowhere to live (his house has been on the market for 7 months and he didn’t consider all this?..yeah right). The following day the realtor calls back saying that he first thought he couldn’t get a loan but now he might be able to get one so then he was still going to sell it. Then today we received a “cancellation of contract”. Can the seller do this? What are my rights and options?
Please help.
A few options here,
All depending on your state of mind.
Do not sign the cancelation of contract. Go to the court house in the county where the home is located, File a Lis pendens. Maybe cost you 150 bucks. The seller will not be able to sell the home to any one with out making you whole. Depending on your motivation and your I hate to lose attitude, you could do all the prep work to set the lis pendens in order , then call the realtor and let him know you expect the sale to go through and if not you will tie up the property forever. The realtors only chance of getting paid will be if you buy the house. I am guessing the prepayment may be less than the realtors fee. In other words there may be enough room for the realtor to discount his fee to pay for his clients ignorance or supposed ignorance. It may be possible they are trying to get out of your deal in order to take another.
Unlikely but possible.
How much is the prepayment penalty ? I would have the escrow agent get the payoff state ment from the sellers bank, review it .Require the seller to give the escrow agent instruction for you to view his closing statement. Then you will be able to see who is getting the proceeds. The seller may not be happy with the dollar figure he is getting but may still be getting cash back at closing, possibly so will the realtor. You can now negotiate with what they are getting. Remember you did not make this mistake they did. Once you see what the seller is recieving, if anything, you can now negotiate the deal. There motivation to show you this paper work will be that you will file a lis pendens and tie up the property till they address you or hire a lawyer and spend a bunch of money trying to get rid of the lis pendens.
Email me if you need help with this. I generally would renegotiate if the seller is honest,dumb, and just made a mistake. But if I smell a rat…and they don’t want to show paper work, as soon as I hang up the phone I would go file the Lis Pendens…They WILL call you back.
Darin