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If a buyer breaches a contract, the recourse is clear...the seller keeps the down payment. But what if the seller breaches the contract and decides they do not want to sell 2 weeks before closing?
you sue them and force them to sell
you have a lawyer right?
you walk away, look for and buy another place, and go on with your life
to sue will be a waste, will likely cost you $$ net, and will only delay your real objective: to buy and move into a new place to live
You can sue for something called "specific performance" which means getting a court to order they abide by the terms of the contract. You can sue for damages as well if the breach cost you some types of expenses because you relied upon the seller's promises. While litigation is pending, you can also sue for injunctive relief, including a temporary restraining order preventing the seller from doing anything that would prevent the court from later ordering the seller to perform the contract with you (e.g., selling the apartment to another person while you are suing to enforce the contract the seller had with you). This is a matter you should be sitting down with your lawyer about immediately if it is actually anticipated or happening. Everything that is said or done at this juncture could have serious legal implications should you wish to enforce the contract (e.g., if the seller returns the down payment to you and you accept and cash it) and you should have a game plan in place.
Re: Wbottom's post: that is very likely the result. Is the headache of a suit worth it? However, you asked what remedies might exist, and I outlined some. If this is a one-of-a-kind property that you must absolutely have and you have the resources to sue, that is available to you. In the real world, most people indeed walk away and start again.
I am in early stages of contract negotiation...I do have a lawyer but was looking for other opinions. I do not anticipate this happening, just trying to understand what seems to be a pretty one-sided ordeal; i.e. remedies for seller are much easier to collect.
buyers tend to be the ones to try to get out of contracts, thus, escrow.
you have to assume the seller is on the market for a reason. Negotiate what you want prior to signing the contract, but once you have a signed contract you have to rely on the contract and assume that the seller is going to sell.
Kylewest's post is dead on, pay extra attention to;
"This is a matter you should be sitting down with your lawyer about immediately if it is actually anticipated or happening. Everything that is said or done at this juncture could have serious legal implications should you wish to enforce the contract (e.g., if the seller returns the down payment to you and you accept and cash it) and you should have a game plan in place."
Did you recently sell a previous place? Have to rent in the meantime while this closing doesn't happen? That rent is claimable..
Bottom line though is the assets of the seller. If the seller is broke, and the sale price covers the mortgage he has on the property, don't waste your time for any "moral" victories.
It is all circumstances. My coworker bought a townhouse in NJ and upon inspection prior to closing a foundation problem was found which clearly was a defect that would let buyer out, or at the least the seller would need to fix. The seller tried to ignore and claim it was nothing.
She went out bought a different place, meanwhile seller would not give back deposit even though it was his breach. He went to sell again and her attorney put a lien against the property which then forced them to return the deposit or they would have been trapped into not being able to sell because the title would not come back clean.
I'm a young agent -- only been in the business about four years -- but I've never seen this happen. More likely is that the attys/brokers lead you to a closing date that was never realistic in the first place, and then that target gets missed and one side grows more and more anxious.
Example: seller is moving to a different place, and can't close on that because there are construction/renovation problems, so wants to delay the original sale.
This is a problem that you should think about, and maybe lay out lines of defense against in the purchaser's rider ... maybe seller pays your housing costs between the "late" date of a contract default and an actual closing, for example. Or maybe you force a closing and write a post-closing occupancy agreement where the seller rents back the place from you .. something I don't like but that should be considered.
Also, I will tell you what the people involved in your deal won't: your rate lock, whatever it is, is probably too short, and there's a significant financial risk that the actions of the seller cause you to lose your lock/have your mortgage commitment expire entirely. So consider defending against that.
DG Neary Realty
"You can sue for something called "specific performance" which means getting a court to order they abide by the terms of the contract."
Specific performance is rarely ever used by the courts. It is one of the least used judgments.
1. if the unit is a condo or private home, you should be able to prevent resale by filing a lis pendens
2. cant do with with coops because they are classified as personal property in New York
3. specific performance requires perfect tender on your part
4. you must offer to close as agreed and provide proof od the means to pay the contract price
5. you must also avoid conduct that couldbe deemed a waiver or release