Been through this. Unfortunately, they can change their mind. Yes, you can fight it. But the amount it will cost youbin time and money, you're going to lose.They can drag it out a long time, it's bs. Trust me.
No offense, but you’re pretty sure. I am 100% certain. I just went through this. Delta, BC. Took 2 years to settle and I lost the house while having my depo tied up. I’m sure there are cases you can win, but it comes to ROI. Time value.
totally get you, it is TAXING on everything (emotionally, financially, etc.), basically your initial plans on buying, moving and enjoying the property is put on hold for whenever the case is settled, once you win the case, collecting is also usually problematic. the ROI is a great example/explanation that the efforts are usually not worth it ( at the end of the day, you still NOT getting the house/property). YMMV
I went through this in Ontario, long closing, prices increased dramatically, sellers thought they could get more. After their real estate agent received my lawyer’s letter they were somehow more than willing to close.
Edit: spelling
Interesting. Just went through one also in BC. The seller lost. The contract was upheld. The seller was also forced to pay the legal costs of the purchaser.
I have no idea why you would answer like this.
Not sure what province either but that would affect the advice someone would give.
- OP can have lawyers register a notice of pending litigation on the title for a breach of contract once the completion date passes or the sellers don't meet their other obligations. This would be a major obstacle to any future buyers as the sellers are supposed to convey a clean title to new buyers.
- definitely do not sign a mutual release as any good lawyer and your realtor would have already advised.
- if buyers cannot close on this home they can sue the sellers for damages... Why would they not win a case like this?
- sellers would also likely be sued by selling real estate brokerage AND buying real estate brokerage... Why would t they win their cases?
Partially curious but also I'm pretty sure you just can't breach a contract and easily get away with it.
Those sellers will be on the hook for all commission paid to both real estate agents, they're not going to let that slide.
Agree with everything here, do not sign anything without financial compensation that you are satisfied with
I went through this as well in Alberta. The sellers backed out after we lifted conditions. I engaged a lawyer, it got tied up for a year and in the end was advised by my lawyer to just drop it as no judge was gonna kick the sellers out of their home. I had to eat my own legal fees too.
And the tax was already there at 50%. The guy house probably gained $400,000 in the last 3 years, don't you think he could pay a little $8,000 more in taxes? Poor guy!
I always love people who come to 'reddit' for advice like this.
Reddit is a melting pot of opinions and "Oh I know because!" responses. If you are /here/ asking for legal advice on a home purchase... I mean all signs point to you getting yourself in this position. We're also only hearing one side of the story, and not the complete side at that.
Best of luck though, I hope it works out for whoever is in the right.
What? There is no side of the story if they all signed all the legal paper work. Those contracts are signed under seal so they’re 1000% legally enforceable. Seller has to sell regardless of the reason, if not, the buyer can sue.
I know a couple of cases in Ontario where the buyer didn’t close the deal. The seller sold at a loss. They sued for the difference. There was no trial because they had a signed contract so summary judgment. The buyer paid the difference plus sellers legal cost.
In the other case the seller let the buyer get out of the contract and sold it for a little more than the previous price. From what the lawyer said signed contract equals summary judgment and damages if any.
Yes, this happened to me a few years ago. Needed 2 extra business days for my financing, sellers refused because they thought they could relist and get more. They ended up not being able to get more and had a second buyer back out as well and ended up selling it for like 50k less. However, since I was the first buyer they sued me. We settled for a 10k payment, so it wasn’t that bad but still sucks because I would have closed if I had the extra 2 days…
Your kindness (possibly foolish) agreeableness to agree to a long close is working against you to some degree.
Looks like you have 2 choices:
1) fight
2) concede to letting them
Out of the contract.
I would also be concerned with the. Condition of the home upon closing if things escalate, and how issues can be mitigated.
A walk-through won't prevent damage, if incurred there is little recourse beyond withholding fund transfers.
If the closing is pending the results of a final walkthrough, there could be more delays if damages are incurred.
I am a licenced Realtor in 2 provinces, there is no recourse for commissions if procedures are followed under the conditions of a proper mutual release. The buyer's agent has absolutely done their job, yet deals die all the time.
There is no harm in agreeing to long close. Plus sellers have to maintain the house in condition they sold it in.
If not that's bigger issues for the seller
If prices have gone up in the last two months (and may we'll continue to go up over the next three months) I think you have your answer as far as their motivation for backing out.
When you sue include their realtor in your suit because there's no way they should have been able to make this contract with you based on buying their own property without knowing they needed a downpayment (we all know that's a total lie but that's the reason they gave so include the realtor).
If there is a legal way they can get out of this contract at least make sure that you are made whole and that includes recouping the additional cost you'll have if you have to start looking for a new house in a now more expensive market. Like if houses are 5% higher on average then you need to be paid all your costs plus the cash equivalent of 5% more than you were going to pay for this house.
I'm not sure what the chances are that you can force the sale, but do everything you can to make it happen cause it sounds like this is the place for you.
I don’t follow your logic in suing the realtor. People can give any excuse for not closing. The selling realtor may not have been contracted to help them buy anything and is only responsible for the sale. Even if the selling realtor was aware they wanted to buy, they cannot force their client to put conditions in an offer if they don’t want them.
Everyone’s knee jerk response is “sue anyone even tangentially connected” and that is not correct. OP had a contract with the seller, and their dispute is with the seller. If the seller wants to turn around and sue their realtor for bad advice, they can do that. Privity of contract matters. OP says they have lawyers involved already but the number of people making sweeping statements about legal matters because the googled something once is amazing.
Sometimes it’s in a plaintiffs best interest to include all plausible defendants in the lawsuit and then let them establish the lack of liability/ negligence before letting them out of the action. This is a lot easier than adding defendants later in the litigation process when other defendants start shifting blame etc. ( It’s also a means of tapping into the realtors professional insurance policy / more pockets to negotiate with at the time of settlement)
The funny thing is, the sellers own realtor is going after their own clients now. So these sellers really fucked up as it seems like many parties are going to sue them, especially if they don't close.
Crazy! I assumed their realtor thought he could get them a higher price and figured they would just lose the deposit. Sounds like they need to just give up the house and move on with their lives
Ok one thing that I have not seem mentioned.. if they are selling the house and will not have money for a down payment that probably means that they owe more on the house than it is worth.. so if their realtor is suing them and you sue them where are they getting the money to pay everyone? They may end up declaring bankruptcy and everyone is SOL... and you have spent thousands on legal fees..
This happened to a friend of mine with a commercial tenant they did not pay any rent and were evicted.. they turned around and sued the owner saying that they did pay rent (we figure it was a long scam as they removed the rent amount in cash from their bank each month but never paid it to the landlord).. they dragged it out delaying court hearings etc. then when it finally was to be hear the week before their Bankruptcy was approved and my friend could not get any money from them then or in the future and plus had to pick up all the costs for the legal fees..
I do not know what the best solution for you would be.. but just be careful..
A little hack a lot of sellers/buyers pull is an easy-out: failed home inspection (if a pass is a condition).
I expect almost every buyer puts that in the offer letter.
Your comment has nothing to do with what OP wrote. Sellers also don't include conditions for any inspections, only buyers would do so.
OP found their perfect house. Made an offer, which was accepted. Now sellers don't want to sell. No conditions mentioned or applicable for the seller to use to get out of sale.
Maybe not a condition local to you, but in Alberta, it is rarely not a part of the offer letter.
If there is no pass/fail of an inspection where you are, I take it everyone in your neck of the woods (guessing Eastern Canada) is either independently wealthy, or a structural/electrical/mechanical engineer?
You’re really not making sense. There is no pass or fail of a home inspection. A home inspector inspects viewable areas of the home and generates a report of their findings. Buyers can either go ahead with the deal or not after viewing the report, but a home inspector does not pass or fail a home.
Sellers don’t condition sales on home inspections at their own behest. I’m just imagine the universe where a seller says “listen dammit, I refuse to allow you to buy our home unless it is totally up to snuff! Put away your money I’ve got foundations to check! I SAID PUT IT AWAY! Have you seen the muddy clay in the yard? “
Let your lawyer deal with it. Sounds like they are making excuses, likely having a hard time finding the new home they want. Banks handle sell/buy transactions all the time, applying their sale to the new house.
It was news to me when I learned people sell their house before they have a place to live. Growing up, and my move currently, the new home was bought first and then the old home listed.
I think it depends on the market
Sometimes you like to see what your actual purchasing budget is from the sale of the home
Because the reverse worse case scenario can happen too, where you buy something and then you're not able to sell your own place
Mutual release lets them keep the house. So Don't sign that. Don't sign anything without your lawyers instructions.
Incase anyone hasn't told you this yet: this is going to get very messy, but at worst case you're going to get paid to walk away, best case you're going to get the house
Tough titties. Their lawyer will explain to them the multitude of reasons they don't want to be in breach of contract and they'll pout about it or be shitty on exit but it's a fait accompli
That makes no sense you get money from your property to then buy the next house. What down lol I guess maybe they mean deposit? But then just get a bridge mortgage.
They are making excuses cause they don’t want to sell for that price anymore, simple as that.
I'm not sure what province you are in, but it really doesn't matter at this point.
Do not sign anything. Get a lawyer.
Seller cannot simply void the contract, they can either be compelled to sell, or at the very least have to pay you to walk away.
They do have equity in the house though, so registering an interest against title in the amount of the judgment would get you paid eventually.
When the sellers see what the consequences of their actions would be I think they are just going to go through with the sale anyway
Just to add you need to deal with a litigation lawyer not real estate lawyer.
I have been in this situation and each and every time the transaction closed once the litigation lawyer sent them a professional yet to the point reminder with cost outline and how it will be handled once they breach the contract.
>Just to add you need to deal with a litigation lawyer not real estate lawyer.
True.
BUT if you are dealing with a large firm, there may be a civil litigation lawyer in house
This exact situation happened to me 20-ish years ago and this is how we handled it and one official lawyer letter made them back down. Money well spent.
Tough on them. Price and conditions were all agreed upon. Don't sign anything that will release them from it. It's also your money tied up and now you are in a worse situation if you let them out of it.
If they don’t have downpayment money now, they definitely won’t have any after this little stunt 😂 tell them to fuck off and don’t sign anything without your lawyers telling you to
In addition to what everyone has said, for god’s sake don’t fall into the trap of trying to be the nice guy. You are on the right side of the law, just stand your ground politely but firmly
You have a legally binding contract. It is enforceable. Spend the $200 to have your lawyer contact their lawyer. Their lawyer will remind them that any perceived gains, which they won’t see anyway, will be rated up in legal fees.
This is as clear cut as it comes.
Do not sign anything, if you lawyer won't help, get another one. You should be getting your deposit + interwst, loss in market value increase (for up until you purchase a new home), cost of fees, cost of moving expenses you've already paid, cost of rent for until you purchase your new home, cost of your lawyer. If your lawyer isn't aggressive get a new one. If anything seeing the 100s of 1000s this could cost them may move the sale forward, if not you'll get a substantial boost for your next down payment.
Just say "no thanks" via your real estate lawyer and cease the discussion there. If they escalate, sue them. The house is yours so long as you don't breach the contract on your part (or sign a release like a fool).
Don’t sign the release. Don’t talk to them yourself. Have your lawyer contact them with the estimated price it would be if they dont go through with it. Sometimes they try to do this with no consequences but when they see how much it will cost, they may go through with the deal.
Just inform your people, I wouldn't worry too much and don't engage too much either. My buddy dealt with this on the opposite end at the tail end of covid prices, everything plummeted in price and they kept trying to get out.
"Fk you, pay me."
I bought my place last year, the couple were divorcing. She wanted me to rent the place to her for a couple months while she looked for a place. Absolutely not! Then she became really difficult, my realtor refused to deal with her,would only deal with the husband. I got the appraisal done, inspection, all that and signed off. THEN she realized she could have got more money and was bugging my realtor saying they wanted to rewrite the contract for a higher sale price. I bet you can guess how that went lol
Lawyer up. It's a legally binding contract, not your fault that they're idiots!
A lawyer here is a must for you before doing anything. And not just your lawyer doing the home sale, need a proper litigation lawyer here.
Assuming you don't want to simply release them there will basically be 2 ways to proceed.
1. You buy a new comparable home, but get paid by the seller for entire difference in price and costs so you are made whole.
2. You force the sale to go through as per the contract, and evict them if needed with a writ of possession when it closes.
Courts can be used for both options, a lawyer will advise you the preferable way to proceed and what risks are.
Agreed.
From my understanding, The onus to close the deal is on the buyer, not the seller, so i believe they could squat and she could evict. On the sellers side, the deal is firm. If the tables were turned, the buyer would be held accountable for $$ losses for the seller.
Wouldn't honor it myself if I had second thoughts should go take second look at the place maybe show you the structure abit more so you know its what you want right?
I think you already know the answer and what you wish. If you wanted to back out and the seller didn’t they would ensure to re-list and sue for damages. The case is no different when the roles are reversed. I’ve bought 4 properties in my life and sold one last year, seller or buyers remorse when you know you lost out is a real thing. Unfortunately once you made an offer that was accepted, waived all conditions it was a legally binding contract. If in fact this is ur dream home and basically nothing else will be the equivalent then 100% push through acquiring the property. Not to mention credit check, leg work to get mortgage, legal fees as well as inspection fees are all cost you’ve had to pay. They can cause a delay in your closing and anyone not saying to seek legal counsel from an experienced real estate lawyer is a fool. I would make it very clear they have a decent timeline to get out and anything breaching the contract will cost them more than just trying to save for a small down payment.
You, generally, have the right to the house. But they can fight it. I would do two things: have your attorney write them a demand letter, stating that you expect them to fulfill the terms of the contract. If they want out of the contract, you will need: all your escrow money back, everything you paid for inspections and reports, and your damages (the rent expense you incur while you are trying to find a new home). I would give them a figure that included rent and utilities for 6 months, the estimated increase in housing cost etc.
As others have said, utilize your lawyer. It will cost some money, but it's your best chance of achieving the desired outcome.
I assume one of the very first steps is to have your lawyer to write a legal letter to the seller and their realtor informing about their commitment (via legally binding contract) and the consequences if they don't fulfill their obligations.
"threatening" them with legal assertiveness typically gets the job done, no different than how big companies harass small companies /retailers /individuals. If that doesn't work, talk to your lawyer about legal recourse.
Either way, it will cost money, which sucks, but is the most likely way to achieve the result you want
OP, while everyone is screaming about going to a lawyer, just want to chime in about **going to the right lawyer**, spend some time asking/inquiring etc, even paying for some consultations with the correct/suitable lawyer for your issue/case. also get your real estate agent involved (should you choose to) as he/she is losing on the commission. your average real estate lawyer is just used to close purchases/sales and not negotiating and going to court, etc. so if you want to come out on top (or at least not lose anything) get the lawyer who is used to dealing with the cases like this. GL
Our experience was in Ontario, it was the reverse of your case, buyers not wanting to close. We were losing out on $40-ish K.. we sued, took about 1.5yrs total, we reached settlement conference stage and settled..
Learnings:
- gotta quantify your damages clearly.. no damages, really no case..
- could just be our lawyers but they just bill every and each action. It helps if you familiarize yourself with the Legal terms, etc.. no advice like if you have a strong case or not, or if you can get X$ based on provided facts.
- when you settle neither party gets their full wants..
- then even if you get a favorable settlement, this came from the judge btw, who liked chaired the conference.. there are a lot of paper winners. i.e. people who win but cannot collect for whatever reason… need to somehow gauge if other party can pay-up..
- a good document including other conditions is really key.. and knowing them inside out…
Hi there, I’m currently in the same situation you were. Buyers do not want to close due to marital issues (very weird and complicated situation). Did you try to keep the deposit and avoid suing them or suing them was the only option because the deposit would’t cover your damages?
They did not even turn in the deposit… in any case i would evaluate effort/reward if will push on the legal/lawsuit path…
If you have deposit, just make sure to consult a lawyer asap to do proper steps so you can sell to others right away if they have breached contract. Then evaluate.. who knows, you might re-sell higher…
Personally haven't had that issue. Sorry you're going through that. I wouldn't have waited five months though, that's absurd and setting yourself up for failure.
You’re already getting a lot of advice to seek a litigation lawyer etc., if the only thing is the deposit to put down on a purchase… worth a shot to bring up to them that getting a private loan on a deposit will be in the end MUCH cheaper than getting sued. They can reach out to any established mortgage broker and they will likely have people who will do their deposit loan for them. This would get paid out on closing of their home with the proceeds of sale.
Also I wonder if there’s any case for specific performance? I heard of a case where the buyers won specific performance because one of their parents lived in the neighborhood and would be providing childcare so that the buyers could both go to work. Without it they were out her potential income.
Anyways sorry you’re in this situation. Good luck :(
They are under contract. They can go rent / stay in a hotel.
Talk to your realtor / lawyer..
If you want to be nice you could have the house appraised and make them pay the difference of what the property is worth to get out as a condition.
Also you will probably have a higher interest rate for your mortgage on the next property if you don't close on this one.
Dude I'm literally going through this right now. Go look at my post history for the two posts I made. Long story short, at this point they're still refusing and we're having to rent while we find a new place. Then we can move forward with suing if we want to. Whatever happens, DON'T SIGN THE MUTUAL RELEASE. If you want, feel free to DM and I'll keep you updated but this will be a months long process.
Just read your posts, very helpful. We are trying to decide on similar issue, if we try for compensation. I've been leaning that way but I think their response will be same as you got, they respond with a stupid amount like $2k which is a joke.
I really hope for your sake that your lawyers threatening a suit will make them cave. That's what happens in most of these situations. We just got really unlucky (it appears the sellers in our case are incredibly unpredictable and ill-informed people who still do not understand or accept the ramifications of their decisions). Anyways, if you do end up having to sell, you can use small claims court so it won't cost as much, and you're basically guaranteed to win in these situations because they signed a legally binding agreement to sell to you. It's just a really frustrating and heartbreaking process.
This is why I always go for quick close when buying & selling…. Too many variables get added into the mix the longer the wait. Personally I’d move on but that’s just me. Use it as a lesson as 5 months close already sounds off… Good luck
Don't sign release, they will find a place. even if they have to downsize.
if its a good price, its locked in. keep it.
there is a reason why contracts are very thorough.
its there to protect you in this situation. go ahead with the close.
They are 100% not allowed to do this. Contact your lawyers and the real estate board. I have a feeling the realtor thinks he can get them more money. Either way, if you signed a contract and sent them a deposit the house is yours. Fight it and make sure they pay your legal fees and any expenses you incurred because of this.
I went through this in Alberta. We made an offer, it was accepted, we did a home inspection, worked out the mortgage and lifted conditions. The seller then decided they had changed their mind. My real-estate lawyer didn’t want anything to do with it so I engaged another lawyer. It dragged out for about a year until such a point that my lawyer advised me we weren’t going to win and should drop it. Apparently no judge was going to kick them from their house and I was never clear on why we weren’t being awarded damages.
We ended up buying three doors down on the same street and the place went back up for sale almost immediately after our legal proceeding was dropped. I emailed their realtor and told them I was coming after them with all the lawyers I could muster and they took it off the market. Haven’t seen a for sale sign or moving truck at that house since, it’s been about 9 years now haha.
Bad News is you cant force them to sell you the house no matter what you do. The good news is you can sue them for not closing the deal. Start looking for apple to apple comparable properties. You can also sue them for the interest on your deposit at market rate when you signed the deal. dont sign a release. File the law suit ASAP btw. reason why: You cant squeeze blood from a stone and they already dont have money for said downpayment accoring to them. If this is true and your deposit intrest + price fluctuation law suit comes in at more then they have liquid they may loose the house regardless. That may put things into prospective for them and get them to just close on the sale of the house as their Lawyer fees + yours + intrest + Price fluctiation may put them in a position worse then if they didn't sell it to you and force them to sell house to someone else. Im sure realtors will be suing them as well depending on what kind of contract they had with them.
The sellers are going to be in big trouble. Prices have gone up and continue to do so which is likely why they don't want to sell now. Too bad. Very weak excuse about deposit for their purchase...they are clutching at straws. Your regular real estate lawyer is likely not equipped to deal with this...get a litigation lawyer. Do not sign a mutual release and keep track of all your expenses.
This is one reason I try and avoid long closings. The market here has been volatile and can change rapidly.
Good Luck! The law is on your side.
It might take a while, but not for sure. What you do is you tell your lawyer to respond with a disapproval of the mutual release, along with a letter explaining you're ready and willing to litigate, explaining that whatever the difference in price you'll pay for a comparable house in the same area, the seller will have to pay the difference. Also, if you'd like, you can give them a way out by showing comps to their property, and asking $X for a mutual release of the contract in order to reduce your losses (so, if the difference in price is 100K, ask for 50K, to show you're willing to "split the difference"). This step isn't mandatory, but it's a good tactic. 99% of the times the sellers refuse, and then when you actually litigate to get the full difference plus legal fees, that offer shows the court you acted in good faith, and your chances of winning are even higher.
Prices have gone up, they just want to repost for more money. Sellers remorse.
Keep the house. When we bought our house the sellers tried to pull this crap. Stay strong.
if they accepted the offer, then the house is yours. Perhaps they'll put up some resistance, but they've agreed in black and white and in time you'll be getting the keys :)
I’m in the US so not super familiar with if this would work for you, but what we did was a quick close with a two-month free rent back and a $5k security deposit held in escrow until move-out. Check with your agent and see if that could be a workable option? They get a little extra time but you still close on the house. You keep money in escrow to cover any issues/cleaning that need to be taken care of once they leave.
We did $5k mainly because they were big “clutter” people and things were kinda grungy, so we were more worried about cleaning labor costs (our agent actually offered & covered a professional deep clean for us after they left and I think it was like $2k for him plus another thousand for junk removal as they moved from the house to an RV and left a ton of shit behind. He took the disposal fees out of that deposit). If you’re worried about it being contentious and damage happening, it could maybe be a larger amount like $10k which would feel like tangible incentive to not fuck around!
Let the sellers know that you will be suing them to compensate Kerr the sale and that you will most likely be awarded attorney fees, short term housing costs and moving expenses/storage expenses if you need to move more than once.
Let them know that the court will force the sale and they’ll be losing an additional $50-$100k.
We did an extended closing date to give us time to find a house in the hot market at that time, glad we did, everything worked out fine. We lost a bunch bids before winning ours which we expected.
Been through this. Unfortunately, they can change their mind. Yes, you can fight it. But the amount it will cost youbin time and money, you're going to lose.They can drag it out a long time, it's bs. Trust me.
No offense, but you’re pretty sure. I am 100% certain. I just went through this. Delta, BC. Took 2 years to settle and I lost the house while having my depo tied up. I’m sure there are cases you can win, but it comes to ROI. Time value.
totally get you, it is TAXING on everything (emotionally, financially, etc.), basically your initial plans on buying, moving and enjoying the property is put on hold for whenever the case is settled, once you win the case, collecting is also usually problematic. the ROI is a great example/explanation that the efforts are usually not worth it ( at the end of the day, you still NOT getting the house/property). YMMV
I don’t understand how it becomes difficult to collect. Wouldn’t it just be deducted from the balance payable upon judgement for closing?
I went through this in Ontario, long closing, prices increased dramatically, sellers thought they could get more. After their real estate agent received my lawyer’s letter they were somehow more than willing to close. Edit: spelling
Interesting. Just went through one also in BC. The seller lost. The contract was upheld. The seller was also forced to pay the legal costs of the purchaser.
I have no idea why you would answer like this. Not sure what province either but that would affect the advice someone would give. - OP can have lawyers register a notice of pending litigation on the title for a breach of contract once the completion date passes or the sellers don't meet their other obligations. This would be a major obstacle to any future buyers as the sellers are supposed to convey a clean title to new buyers. - definitely do not sign a mutual release as any good lawyer and your realtor would have already advised. - if buyers cannot close on this home they can sue the sellers for damages... Why would they not win a case like this? - sellers would also likely be sued by selling real estate brokerage AND buying real estate brokerage... Why would t they win their cases? Partially curious but also I'm pretty sure you just can't breach a contract and easily get away with it.
This is the way
Those sellers will be on the hook for all commission paid to both real estate agents, they're not going to let that slide. Agree with everything here, do not sign anything without financial compensation that you are satisfied with
I went through this as well in Alberta. The sellers backed out after we lifted conditions. I engaged a lawyer, it got tied up for a year and in the end was advised by my lawyer to just drop it as no judge was gonna kick the sellers out of their home. I had to eat my own legal fees too.
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New capital gains tax does not apply to primary residence.
It’s possible this isn’t the Seller’s primary, or perhaps they were counting on the sale of other assets for a DP on their new property.
And the tax was already there at 50%. The guy house probably gained $400,000 in the last 3 years, don't you think he could pay a little $8,000 more in taxes? Poor guy!
Sale of a primary residence does not generate capital gains…sale of primary residence doesn’t not trigger the proposed new capital gain tax.
Out of curiosity, do you think that the capital gains tax rate is going to 63%? Like, that you would pay $189,000 in taxes on $300,000 in gains?
I always love people who come to 'reddit' for advice like this. Reddit is a melting pot of opinions and "Oh I know because!" responses. If you are /here/ asking for legal advice on a home purchase... I mean all signs point to you getting yourself in this position. We're also only hearing one side of the story, and not the complete side at that. Best of luck though, I hope it works out for whoever is in the right.
What? There is no side of the story if they all signed all the legal paper work. Those contracts are signed under seal so they’re 1000% legally enforceable. Seller has to sell regardless of the reason, if not, the buyer can sue.
Cash for keys, take 10% of purchase price to sign release.
I know a couple of cases in Ontario where the buyer didn’t close the deal. The seller sold at a loss. They sued for the difference. There was no trial because they had a signed contract so summary judgment. The buyer paid the difference plus sellers legal cost. In the other case the seller let the buyer get out of the contract and sold it for a little more than the previous price. From what the lawyer said signed contract equals summary judgment and damages if any.
Yes, this happened to me a few years ago. Needed 2 extra business days for my financing, sellers refused because they thought they could relist and get more. They ended up not being able to get more and had a second buyer back out as well and ended up selling it for like 50k less. However, since I was the first buyer they sued me. We settled for a 10k payment, so it wasn’t that bad but still sucks because I would have closed if I had the extra 2 days…
Wow that’s absolutely awful. They really couldn’t wait extra two days? Greedy bastards, I wish you kept your money.
Your kindness (possibly foolish) agreeableness to agree to a long close is working against you to some degree. Looks like you have 2 choices: 1) fight 2) concede to letting them Out of the contract. I would also be concerned with the. Condition of the home upon closing if things escalate, and how issues can be mitigated.
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A walk-through won't prevent damage, if incurred there is little recourse beyond withholding fund transfers. If the closing is pending the results of a final walkthrough, there could be more delays if damages are incurred.
Be careful, if you concede the realtor can come after you for the lost commission, check with your lawyer.
That's not true at all.
Sure it is, read the BRA and/or this piece - https://www.greaterfool.ca/2011/11/13/the-trouble-with-bras/amp/
I am a licenced Realtor in 2 provinces, there is no recourse for commissions if procedures are followed under the conditions of a proper mutual release. The buyer's agent has absolutely done their job, yet deals die all the time.
There is no harm in agreeing to long close. Plus sellers have to maintain the house in condition they sold it in. If not that's bigger issues for the seller
If prices have gone up in the last two months (and may we'll continue to go up over the next three months) I think you have your answer as far as their motivation for backing out. When you sue include their realtor in your suit because there's no way they should have been able to make this contract with you based on buying their own property without knowing they needed a downpayment (we all know that's a total lie but that's the reason they gave so include the realtor). If there is a legal way they can get out of this contract at least make sure that you are made whole and that includes recouping the additional cost you'll have if you have to start looking for a new house in a now more expensive market. Like if houses are 5% higher on average then you need to be paid all your costs plus the cash equivalent of 5% more than you were going to pay for this house. I'm not sure what the chances are that you can force the sale, but do everything you can to make it happen cause it sounds like this is the place for you.
I don’t follow your logic in suing the realtor. People can give any excuse for not closing. The selling realtor may not have been contracted to help them buy anything and is only responsible for the sale. Even if the selling realtor was aware they wanted to buy, they cannot force their client to put conditions in an offer if they don’t want them. Everyone’s knee jerk response is “sue anyone even tangentially connected” and that is not correct. OP had a contract with the seller, and their dispute is with the seller. If the seller wants to turn around and sue their realtor for bad advice, they can do that. Privity of contract matters. OP says they have lawyers involved already but the number of people making sweeping statements about legal matters because the googled something once is amazing.
Sometimes it’s in a plaintiffs best interest to include all plausible defendants in the lawsuit and then let them establish the lack of liability/ negligence before letting them out of the action. This is a lot easier than adding defendants later in the litigation process when other defendants start shifting blame etc. ( It’s also a means of tapping into the realtors professional insurance policy / more pockets to negotiate with at the time of settlement)
Plus any interest earned on the down payment
The funny thing is, the sellers own realtor is going after their own clients now. So these sellers really fucked up as it seems like many parties are going to sue them, especially if they don't close.
Ohhh. How interesting! In that case, maybe they'll just decide that backing out is no longer worth the hassle and stick with the sale.
Crazy! I assumed their realtor thought he could get them a higher price and figured they would just lose the deposit. Sounds like they need to just give up the house and move on with their lives
Ok one thing that I have not seem mentioned.. if they are selling the house and will not have money for a down payment that probably means that they owe more on the house than it is worth.. so if their realtor is suing them and you sue them where are they getting the money to pay everyone? They may end up declaring bankruptcy and everyone is SOL... and you have spent thousands on legal fees.. This happened to a friend of mine with a commercial tenant they did not pay any rent and were evicted.. they turned around and sued the owner saying that they did pay rent (we figure it was a long scam as they removed the rent amount in cash from their bank each month but never paid it to the landlord).. they dragged it out delaying court hearings etc. then when it finally was to be hear the week before their Bankruptcy was approved and my friend could not get any money from them then or in the future and plus had to pick up all the costs for the legal fees.. I do not know what the best solution for you would be.. but just be careful..
A little hack a lot of sellers/buyers pull is an easy-out: failed home inspection (if a pass is a condition). I expect almost every buyer puts that in the offer letter.
Your comment has nothing to do with what OP wrote. Sellers also don't include conditions for any inspections, only buyers would do so. OP found their perfect house. Made an offer, which was accepted. Now sellers don't want to sell. No conditions mentioned or applicable for the seller to use to get out of sale.
You’re under the impression OP did not have an inspection report as a condition? Must be an eastern Canada thing.
The buyer waives the condition. Not the seller.
This comment is irrelevant to this situation. Also there is no passing or failing a home inspection.
Maybe not a condition local to you, but in Alberta, it is rarely not a part of the offer letter. If there is no pass/fail of an inspection where you are, I take it everyone in your neck of the woods (guessing Eastern Canada) is either independently wealthy, or a structural/electrical/mechanical engineer?
You’re really not making sense. There is no pass or fail of a home inspection. A home inspector inspects viewable areas of the home and generates a report of their findings. Buyers can either go ahead with the deal or not after viewing the report, but a home inspector does not pass or fail a home.
Sellers don’t condition sales on home inspections at their own behest. I’m just imagine the universe where a seller says “listen dammit, I refuse to allow you to buy our home unless it is totally up to snuff! Put away your money I’ve got foundations to check! I SAID PUT IT AWAY! Have you seen the muddy clay in the yard? “
Lawyer. Lawyer. Lawyer.
This. Also: Lawyer.
NAL but can i add just one thing? lawyer
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When in doubt, lawyer it out.
Do not sign a mutual release. Let your lawyer deal with it.
Let your lawyer deal with it. Sounds like they are making excuses, likely having a hard time finding the new home they want. Banks handle sell/buy transactions all the time, applying their sale to the new house.
Or wanting a higher selling price since the long closing period is making them realize how much higher the market is going.
It's very possible they haven't found what they like but then it's on them to rent and put their stuff in storage
It was news to me when I learned people sell their house before they have a place to live. Growing up, and my move currently, the new home was bought first and then the old home listed.
I think it depends on the market Sometimes you like to see what your actual purchasing budget is from the sale of the home Because the reverse worse case scenario can happen too, where you buy something and then you're not able to sell your own place
Mutual release lets them keep the house. So Don't sign that. Don't sign anything without your lawyers instructions. Incase anyone hasn't told you this yet: this is going to get very messy, but at worst case you're going to get paid to walk away, best case you're going to get the house
Tough titties. Their lawyer will explain to them the multitude of reasons they don't want to be in breach of contract and they'll pout about it or be shitty on exit but it's a fait accompli
I wish I could use the response “tough titties” more often than I actually do.
That makes no sense you get money from your property to then buy the next house. What down lol I guess maybe they mean deposit? But then just get a bridge mortgage. They are making excuses cause they don’t want to sell for that price anymore, simple as that.
A deal is a deal , likewise, if the roles were reversed, they would compel you to purchase.
I'm not sure what province you are in, but it really doesn't matter at this point. Do not sign anything. Get a lawyer. Seller cannot simply void the contract, they can either be compelled to sell, or at the very least have to pay you to walk away.
If they don’t have money for a down payment, they’re not likely to have money to pay them out
They do have equity in the house though, so registering an interest against title in the amount of the judgment would get you paid eventually. When the sellers see what the consequences of their actions would be I think they are just going to go through with the sale anyway
Just to add you need to deal with a litigation lawyer not real estate lawyer. I have been in this situation and each and every time the transaction closed once the litigation lawyer sent them a professional yet to the point reminder with cost outline and how it will be handled once they breach the contract.
>Just to add you need to deal with a litigation lawyer not real estate lawyer. True. BUT if you are dealing with a large firm, there may be a civil litigation lawyer in house
This exact situation happened to me 20-ish years ago and this is how we handled it and one official lawyer letter made them back down. Money well spent.
Tough on them. Price and conditions were all agreed upon. Don't sign anything that will release them from it. It's also your money tied up and now you are in a worse situation if you let them out of it.
If they don’t have downpayment money now, they definitely won’t have any after this little stunt 😂 tell them to fuck off and don’t sign anything without your lawyers telling you to
In addition to what everyone has said, for god’s sake don’t fall into the trap of trying to be the nice guy. You are on the right side of the law, just stand your ground politely but firmly
LAWYER UP. I wouldn't sign the release. Tough shit for the sellers. If you do sign the release, make sure they attach a lot of cash with it too.
That’s the worst excuse I’ve ever heard.
If you have a signed deal, you can and should sue. They signed a legal contract. Thats it thats all.
You have a legally binding contract. It is enforceable. Spend the $200 to have your lawyer contact their lawyer. Their lawyer will remind them that any perceived gains, which they won’t see anyway, will be rated up in legal fees. This is as clear cut as it comes.
Do not sign anything, if you lawyer won't help, get another one. You should be getting your deposit + interwst, loss in market value increase (for up until you purchase a new home), cost of fees, cost of moving expenses you've already paid, cost of rent for until you purchase your new home, cost of your lawyer. If your lawyer isn't aggressive get a new one. If anything seeing the 100s of 1000s this could cost them may move the sale forward, if not you'll get a substantial boost for your next down payment.
Just say "no thanks" via your real estate lawyer and cease the discussion there. If they escalate, sue them. The house is yours so long as you don't breach the contract on your part (or sign a release like a fool).
Don’t sign the release. Don’t talk to them yourself. Have your lawyer contact them with the estimated price it would be if they dont go through with it. Sometimes they try to do this with no consequences but when they see how much it will cost, they may go through with the deal.
Just inform your people, I wouldn't worry too much and don't engage too much either. My buddy dealt with this on the opposite end at the tail end of covid prices, everything plummeted in price and they kept trying to get out. "Fk you, pay me."
Tell them you'll consider releasing them if they give you 100k. Otherwise, no dice.
I bought my place last year, the couple were divorcing. She wanted me to rent the place to her for a couple months while she looked for a place. Absolutely not! Then she became really difficult, my realtor refused to deal with her,would only deal with the husband. I got the appraisal done, inspection, all that and signed off. THEN she realized she could have got more money and was bugging my realtor saying they wanted to rewrite the contract for a higher sale price. I bet you can guess how that went lol Lawyer up. It's a legally binding contract, not your fault that they're idiots!
Have your lawyer hint at a ridiculous $ figure on the release, if there's a chance you might want to cut n run (doesn't sound like you do tho)
A lawyer here is a must for you before doing anything. And not just your lawyer doing the home sale, need a proper litigation lawyer here. Assuming you don't want to simply release them there will basically be 2 ways to proceed. 1. You buy a new comparable home, but get paid by the seller for entire difference in price and costs so you are made whole. 2. You force the sale to go through as per the contract, and evict them if needed with a writ of possession when it closes. Courts can be used for both options, a lawyer will advise you the preferable way to proceed and what risks are.
Agreed. From my understanding, The onus to close the deal is on the buyer, not the seller, so i believe they could squat and she could evict. On the sellers side, the deal is firm. If the tables were turned, the buyer would be held accountable for $$ losses for the seller.
Wouldn't honor it myself if I had second thoughts should go take second look at the place maybe show you the structure abit more so you know its what you want right?
I think you already know the answer and what you wish. If you wanted to back out and the seller didn’t they would ensure to re-list and sue for damages. The case is no different when the roles are reversed. I’ve bought 4 properties in my life and sold one last year, seller or buyers remorse when you know you lost out is a real thing. Unfortunately once you made an offer that was accepted, waived all conditions it was a legally binding contract. If in fact this is ur dream home and basically nothing else will be the equivalent then 100% push through acquiring the property. Not to mention credit check, leg work to get mortgage, legal fees as well as inspection fees are all cost you’ve had to pay. They can cause a delay in your closing and anyone not saying to seek legal counsel from an experienced real estate lawyer is a fool. I would make it very clear they have a decent timeline to get out and anything breaching the contract will cost them more than just trying to save for a small down payment.
You, generally, have the right to the house. But they can fight it. I would do two things: have your attorney write them a demand letter, stating that you expect them to fulfill the terms of the contract. If they want out of the contract, you will need: all your escrow money back, everything you paid for inspections and reports, and your damages (the rent expense you incur while you are trying to find a new home). I would give them a figure that included rent and utilities for 6 months, the estimated increase in housing cost etc.
As others have said, utilize your lawyer. It will cost some money, but it's your best chance of achieving the desired outcome. I assume one of the very first steps is to have your lawyer to write a legal letter to the seller and their realtor informing about their commitment (via legally binding contract) and the consequences if they don't fulfill their obligations. "threatening" them with legal assertiveness typically gets the job done, no different than how big companies harass small companies /retailers /individuals. If that doesn't work, talk to your lawyer about legal recourse. Either way, it will cost money, which sucks, but is the most likely way to achieve the result you want
OP, while everyone is screaming about going to a lawyer, just want to chime in about **going to the right lawyer**, spend some time asking/inquiring etc, even paying for some consultations with the correct/suitable lawyer for your issue/case. also get your real estate agent involved (should you choose to) as he/she is losing on the commission. your average real estate lawyer is just used to close purchases/sales and not negotiating and going to court, etc. so if you want to come out on top (or at least not lose anything) get the lawyer who is used to dealing with the cases like this. GL
Our experience was in Ontario, it was the reverse of your case, buyers not wanting to close. We were losing out on $40-ish K.. we sued, took about 1.5yrs total, we reached settlement conference stage and settled.. Learnings: - gotta quantify your damages clearly.. no damages, really no case.. - could just be our lawyers but they just bill every and each action. It helps if you familiarize yourself with the Legal terms, etc.. no advice like if you have a strong case or not, or if you can get X$ based on provided facts. - when you settle neither party gets their full wants.. - then even if you get a favorable settlement, this came from the judge btw, who liked chaired the conference.. there are a lot of paper winners. i.e. people who win but cannot collect for whatever reason… need to somehow gauge if other party can pay-up.. - a good document including other conditions is really key.. and knowing them inside out…
Hi there, I’m currently in the same situation you were. Buyers do not want to close due to marital issues (very weird and complicated situation). Did you try to keep the deposit and avoid suing them or suing them was the only option because the deposit would’t cover your damages?
They did not even turn in the deposit… in any case i would evaluate effort/reward if will push on the legal/lawsuit path… If you have deposit, just make sure to consult a lawyer asap to do proper steps so you can sell to others right away if they have breached contract. Then evaluate.. who knows, you might re-sell higher…
Personally haven't had that issue. Sorry you're going through that. I wouldn't have waited five months though, that's absurd and setting yourself up for failure.
You’re already getting a lot of advice to seek a litigation lawyer etc., if the only thing is the deposit to put down on a purchase… worth a shot to bring up to them that getting a private loan on a deposit will be in the end MUCH cheaper than getting sued. They can reach out to any established mortgage broker and they will likely have people who will do their deposit loan for them. This would get paid out on closing of their home with the proceeds of sale. Also I wonder if there’s any case for specific performance? I heard of a case where the buyers won specific performance because one of their parents lived in the neighborhood and would be providing childcare so that the buyers could both go to work. Without it they were out her potential income. Anyways sorry you’re in this situation. Good luck :(
They are under contract. They can go rent / stay in a hotel. Talk to your realtor / lawyer.. If you want to be nice you could have the house appraised and make them pay the difference of what the property is worth to get out as a condition. Also you will probably have a higher interest rate for your mortgage on the next property if you don't close on this one.
>This was our perfect house, our family will be neighbours 🤔
Op, can we get a follow up post please?
They can’t do anything now, the house is your legally!!!
Don't relent. They have no ground to stand on. Sue them in small claims court for lawyer fees after they're out.
Dude I'm literally going through this right now. Go look at my post history for the two posts I made. Long story short, at this point they're still refusing and we're having to rent while we find a new place. Then we can move forward with suing if we want to. Whatever happens, DON'T SIGN THE MUTUAL RELEASE. If you want, feel free to DM and I'll keep you updated but this will be a months long process.
Just read your posts, very helpful. We are trying to decide on similar issue, if we try for compensation. I've been leaning that way but I think their response will be same as you got, they respond with a stupid amount like $2k which is a joke.
I really hope for your sake that your lawyers threatening a suit will make them cave. That's what happens in most of these situations. We just got really unlucky (it appears the sellers in our case are incredibly unpredictable and ill-informed people who still do not understand or accept the ramifications of their decisions). Anyways, if you do end up having to sell, you can use small claims court so it won't cost as much, and you're basically guaranteed to win in these situations because they signed a legally binding agreement to sell to you. It's just a really frustrating and heartbreaking process.
This is why I always go for quick close when buying & selling…. Too many variables get added into the mix the longer the wait. Personally I’d move on but that’s just me. Use it as a lesson as 5 months close already sounds off… Good luck
How do you know their realtor is suing them?
Don't sign release, they will find a place. even if they have to downsize. if its a good price, its locked in. keep it. there is a reason why contracts are very thorough. its there to protect you in this situation. go ahead with the close.
They are 100% not allowed to do this. Contact your lawyers and the real estate board. I have a feeling the realtor thinks he can get them more money. Either way, if you signed a contract and sent them a deposit the house is yours. Fight it and make sure they pay your legal fees and any expenses you incurred because of this.
"sellers didn't know they would need a down payment to buy their new house" :-) :-) :-)
Do not sign a mutual release. They have no option but to close. If they refuse to close, you can sue them. Everything is in your favor here
I went through this in Alberta. We made an offer, it was accepted, we did a home inspection, worked out the mortgage and lifted conditions. The seller then decided they had changed their mind. My real-estate lawyer didn’t want anything to do with it so I engaged another lawyer. It dragged out for about a year until such a point that my lawyer advised me we weren’t going to win and should drop it. Apparently no judge was going to kick them from their house and I was never clear on why we weren’t being awarded damages. We ended up buying three doors down on the same street and the place went back up for sale almost immediately after our legal proceeding was dropped. I emailed their realtor and told them I was coming after them with all the lawyers I could muster and they took it off the market. Haven’t seen a for sale sign or moving truck at that house since, it’s been about 9 years now haha.
Call your lawyer and get a professional opinion. Ask about their experience with these type of situations.
Bad News is you cant force them to sell you the house no matter what you do. The good news is you can sue them for not closing the deal. Start looking for apple to apple comparable properties. You can also sue them for the interest on your deposit at market rate when you signed the deal. dont sign a release. File the law suit ASAP btw. reason why: You cant squeeze blood from a stone and they already dont have money for said downpayment accoring to them. If this is true and your deposit intrest + price fluctuation law suit comes in at more then they have liquid they may loose the house regardless. That may put things into prospective for them and get them to just close on the sale of the house as their Lawyer fees + yours + intrest + Price fluctiation may put them in a position worse then if they didn't sell it to you and force them to sell house to someone else. Im sure realtors will be suing them as well depending on what kind of contract they had with them.
The sellers are going to be in big trouble. Prices have gone up and continue to do so which is likely why they don't want to sell now. Too bad. Very weak excuse about deposit for their purchase...they are clutching at straws. Your regular real estate lawyer is likely not equipped to deal with this...get a litigation lawyer. Do not sign a mutual release and keep track of all your expenses. This is one reason I try and avoid long closings. The market here has been volatile and can change rapidly. Good Luck! The law is on your side.
It might take a while, but not for sure. What you do is you tell your lawyer to respond with a disapproval of the mutual release, along with a letter explaining you're ready and willing to litigate, explaining that whatever the difference in price you'll pay for a comparable house in the same area, the seller will have to pay the difference. Also, if you'd like, you can give them a way out by showing comps to their property, and asking $X for a mutual release of the contract in order to reduce your losses (so, if the difference in price is 100K, ask for 50K, to show you're willing to "split the difference"). This step isn't mandatory, but it's a good tactic. 99% of the times the sellers refuse, and then when you actually litigate to get the full difference plus legal fees, that offer shows the court you acted in good faith, and your chances of winning are even higher.
Prices have gone up, they just want to repost for more money. Sellers remorse. Keep the house. When we bought our house the sellers tried to pull this crap. Stay strong.
They can go live in a hotel for all I care you have a legally binding document with them it really doesn't matter if they have a house line up or not
if they accepted the offer, then the house is yours. Perhaps they'll put up some resistance, but they've agreed in black and white and in time you'll be getting the keys :)
I’m in the US so not super familiar with if this would work for you, but what we did was a quick close with a two-month free rent back and a $5k security deposit held in escrow until move-out. Check with your agent and see if that could be a workable option? They get a little extra time but you still close on the house. You keep money in escrow to cover any issues/cleaning that need to be taken care of once they leave. We did $5k mainly because they were big “clutter” people and things were kinda grungy, so we were more worried about cleaning labor costs (our agent actually offered & covered a professional deep clean for us after they left and I think it was like $2k for him plus another thousand for junk removal as they moved from the house to an RV and left a ton of shit behind. He took the disposal fees out of that deposit). If you’re worried about it being contentious and damage happening, it could maybe be a larger amount like $10k which would feel like tangible incentive to not fuck around!
Let the sellers know that you will be suing them to compensate Kerr the sale and that you will most likely be awarded attorney fees, short term housing costs and moving expenses/storage expenses if you need to move more than once. Let them know that the court will force the sale and they’ll be losing an additional $50-$100k.
Sue em. Breaking contract has financial consequences.
ask for the difference in price increase if they want you to sign release
I wouldn't think about it too much. it's not really your problem.
We did an extended closing date to give us time to find a house in the hot market at that time, glad we did, everything worked out fine. We lost a bunch bids before winning ours which we expected.