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Can a Seller legally violate terms in a Purchase Agreement?

I've been trying to purchase a home.  When I made my offer, there were certain stipulations that I added to the offer which were accepted and added to the Sales Contract that both the Seller and I signed.  They were as follows:

1.  Seller to reimburse buyer the Appraisal Fee at time of closing.
2.  Seller to pay any and all closing costs.
3.  Seller to provide a New Home Warranty for the First Year and a Home warranty for the 2nd year, all at Seller's Expense.

Now that the loan has been approved, the Seller is trying to not take care of the closing costs which is delaying the scheduling of a closing date.  The seller was even trying to work with my mortgage bank to manipulate the down payment grant I received and the mortgage, to cover those closing costs, which basically meant that the seller was still trying to rope me with the Closing Costs.

I really want this house and the only thing holding up is the closing cost issue.  Is there any legal recourse I can take to force the seller to abide by the terms of the contract that he signed or am I just out of luck?
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April 09 - Kansas City
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Answers (7)

By the time you pay attorney fees to hold the Seller's feet to the contract, you will have spent as much as whatever difference they are making up for by trying to manipulate your lenders numbers.
I would first call your lender, and try to break communications between them and the Seller(s).
Unfortunately, in most cases, your biggest tool of negotiation at this point is to hand them a cancellation agreement, and tell them "Either this is signed, or the closing docs are, tomorrow" and walk away.
For future reference, always hire an Agent to represent your best interest. They would have specified an amount of closing costs to be paid by the Seller, preventing them from being able to pull this on you. Because there is no amount specified on the original contract, they aren't technically in breach of contract for trying to change what "all closing costs" amounts to...
Best of luck, let us know how it works out!
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August 14
Profile picture for RandyKarl

Thanks for all your answers...  The seller is a company.  It's a brand new home, built as part of a neighborhood redevelopment project.  I did not have an agent, the seller did.  The seller's agent created the 26 page contract document, I reviewed it, and signed.  The seller's agent then took it to the seller, who is represented by an attorney.  The attorney reviewed the entire contract prior to it being signed by the seller.

There are some caps on the amounts, but suffice it to say, there is no stipulation in the contract to grant exception for those caps.  I know I'm not an attorney, but from my experience, when stipulations are agreed upon contractually, even if outside issues make it more difficult to satisfy the terms of the contract, it is still the responsibility of both parties to abide by those stipulations.  The seller, his attorney, and agent, should have been more knowledgeable regarding these stipulations prior to entering into a contractual agreement regarding the sale of this home, especially since they new upfront that this would be a VA Loan, with the Down Payment Assistance Grant, my credit, etc...

From what I've seen thus far, there has been no attempt by the seller to satisfy the terms regarding the closing costs.  The seller has been trying to manipulate numbers from my mortgage approval and the down payment grant I received for the purchase of this home to cover the closing costs, which in essence is still making me pay the closing costs.

I don't know any attorney's so I'm just going to have to look around and see who I can find and hope that I can find an attorney who specializes in this.

Oh, and Leo, yes, I've basically already done that in my email communication with the Bank, Seller, and the Seller's Attorney.  I made it clear that the current arrangement was not working and at best a vain attempt to circumvent the contract we have for the home purchase.

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April 10
First of all....yes, talk to an attorney.

In my 18 years in the business I've had a couple of deals like this. My take on it is that the seller is still negotiating with you and will probably continue to do so until the ink is dry on the deed. I know there's a contract, but obviously the seller doesn't care about its terms, clear or not.

Talk to an attorney about enforcing the terms of the contract.

Or use my favorite negotiating technique and stand up and walk away from the table.
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April 10
I cant believe such open ended stipulations would be added to a purchase and sale as you have written them "Seller to pay any and all closing costs" is ridiculous!

Important questions to consider... what are the closing costs? what will the lender allow the seller to contribute towards these closing costs? do closing costs include points, prepaids, an overpriced mortgage brokers fee (cough cough..."quicken loans"), etc.etc.etc. ?

It requires an attorney at this point if the parties cannot resolve this matter... my guess would be an attorney is going to rip that P & S apart as having zero validity due to lack of information, illusory or unconscionable. reasonable closing cost to one party may be $800 while to another party may be $18,000 (do you understand the problem with this contract now?)

Talk to an attorney please.... best wishes!
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April 10
Only an attorney can advise you of your legal options, RK.

All the best,
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April 10
Profile picture for Dan Tabit
Randy,
A contract is a legal document, that if created properly means what it says.  The problem is that sometimes if the language isn't precise, it opens a door for one party of another to change something.
Unfortunately it may take an attorney to sort through what was written and what the seller is trying to do.  To answer your question, it's not legal for either party to unilaterally change the terms. 
My question for you, who wrote the contract?  Was it at least reviewed by an attorney if not professionally prepared?  Who is handling the closing? 
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April 10
If the seller agreed in the contract to pay any and all closing costs, then that is what he has to do.  However, some lenders will only allow the seller to contribute a certain amount or percentage of the purchase price toward the buyers closing costs.  Need to know if the lender caps the amount the seller can pay toward your closing costs.  Not sure why the seller is arguing with anyone about what he agreed to do in the contract.  Did he have representation (an agent) when he signed the contract?  Did you have representation as the buyer?  If you both had agents, then your agent should be talking to the seller's agent and the seller's agent should be explaining that to the seller.  Sounds like the seller did not understand what he signed and it is possible he does not have the funds to do what he has agreed to do.  This so often happens when sellers try to sell their homes as for sale by owners instead of enlisting the services of a professional to make sure they explain what they are getting themselves into.
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April 09
 
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