Refer to your contract. What does it say about damages? Most say the sellers only recourse is keeping the earnest money. Technically, they can sue for specific performance, compelling you to complete the deal. But then, how many courts are going to force someone without money to buy a house? Most contracts have a liquidated damage provision. Look for the clause in yours.
So why do you not want the carryback option? Bad terms, or you just don’t want to be involved with it? It sounds like you are dealing with an investor. I say that because I’m guessing that he owned the house a very short time and he’s willing to carry back because that portion of the sale is just gravy anyhow.
If you MUST pay the $1000, then make it $1/month for 1000 months (jk).
In the event of purchasing a property, being a beginner, I forgot to include a financing addendum. However, the PA did say I would be applying for a conventional loan. I was informed by my loan officer I do not qualify for the full loan amount. The seller offered to carryback the difference. I refused and also realized the seller told lies about the property such as how long he owned it was very different from the county recorders records. Can he sue me? Am I required to accept his financing? he says he will accept $1000.00 to walk away. Does he have a case? I dont want to pay if I dont have to.
Thank you
Re: You Should Have an Out ! - Posted by Cheryl Lopez
Posted by Cheryl Lopez on July 28, 2004 at 21:09:39:
LEAH –
First … did you use your “own” contract or a standard pre-printed real estate form? Or you working with an agent?
Did you state the loan terms that you were “applying” for? If so (which you should have) then with your lender offering you terms that are different than what you wanted … you have an out. Get the lender to send you the terms offered in writing
Seller financing. What were the terms? Get the seller terms in writing. If the seller is offering high rates and other negative terms (interest only, due in a few years, etc) … then you should have an out.
Get all the above documents in WRITING then prepare an “Addendum” to seller. Outline the info on lender loan (are not acceptable to you), seller financing loan (you do not approve of the terms), and are cancelling escrow with your deposit to be returned to you (buyer).
Then contact the title company and instruct them to prepare cancel instructions to be sent to you and seller. Both will have to agree and sign before your full money is returned to you.
If the both of you do not agree … then file in Small Claims Court. Cases $5,000 and below are handled in Small Claims Court and you do not need an attorney (in California other states may vary). Here in California … Judges generally favor buyers and return the deposit to buyers.
I say do not give into this seller and proceed on to get the documents in writing, prepare Addendum, cancel escrow, and if necesary go to Small Claims Court.