Profile picture for user563194

Can we get out of this contract?

My wife and I were in the process of buying a house in Phoenix, AZ. Offer and counter-offer had been made and a contract accepted. Then came the inspection and our realtor sent the seller a things-we-want-and-need-done form (I don't know for sure what it's called). While we waited for a response from the seller, an out-of-state transfer with my job that I had given up on ever happening finally and suddenly materialized. So now we can finally take our kids back home to be near family and friends, but after I got that news, the realtor reported to us that the seller has agreed to do all the repairs, etc. So he says we have an accepted contract and cannot just walk away, that in order to get out of the deal it is going to cost us. We haven't even finished all the loan application papers so there is no mortgage yet, so doesn't that mean there isn't a sale? And aside from the $1,000 earnest money (is that lost now?), are we liable for some other funds? Are we unable to back out of this?
  • March 25 2012 - Phoenix
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Answers (16)

Profile picture for Cindy Quinton
Out of curiosity, since it has been over 6 months, how did this work out?
  • October 18 2012
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Two things, First, consult an attorney. Second, in fairness you should forfeit your $1000. You've tied up their property. New job, great news. But think of the Seller. They've been played for at least a grand. Give it to em. Enjoy your new job.
  • October 18 2012
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If you accept the job & will be moving out of state, then you will not qualify for the home loan if you were financing this as an Owner Occupied home. Just be sure you share this information with your lender.

You may want to review the Loan Contingency section of your purchase contract. There might be a very strong possibility that this section will dictate that you get your earnest money back.

Good luck with your new job!

All the best,
Ros 
  • October 18 2012
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Profile picture for JPyszChicago
Technically, you are losing your earnest money. Was there a mortgage contingency, there should be one and that could/would help. Also, try to talk to your agent, he should be able to back that money out for you....
  • October 18 2012
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You will certainly want to ask your realtor for specific recommendations based on the terms of the contract that you are under.
  • October 17 2012
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Profile picture for Cindy Quinton
Betty, you may wish to post a new question with more details.  

new questions
  • October 08 2012
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Profile picture for BettyMiller Gray
We have signed a contract an decided this wasn't the house for us,,the realtor said we can not get out of the contract,,This is going on in clarksville TTenn. The realtor is apparently working more for the seller than us,Can anyone advice us on what to do ,,Thank's stuck in TN
  • October 08 2012
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Profile picture for Appraisal guy
Back out of the deal. If you must, lose your $1000 and move on. I made a bid on a home and my wife decided that it was not the correct home. My realtor "made it happen" and was able to back out of the deal and give me my $1000. So they can make it happen.
  • April 03 2012
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You can still back out but, you will more than likely lose your earnest money. It all depends on the the terms you agreed to in the purchase contract. I understand there are some circumstances that are beyond your control and you have to do what is best for your family. That being said, I agree with what everyone is saying regarding doing something nice for your agent. Real estate professionals invest a lot of their time and money into finding you the right home, in hopes that you will be completing the transaction with them. I understand their frustration with this situation. I hope everything works out, good luck!
  • March 26 2012
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You are not obligated to offer your earnest money to the seller when you back out of a contract for any reason at any time. In a standard AZ purchase contract, the seller would have a right to keep your earnest money, however, it is their choice if they'd like to enforce that.

The title company will disperse the earnest money according to the contract or any new agreed to terms set forth in your cancellation notice.

Other than your earnest money, the only other money the seller may want from you would be the cost to complete the repairs you requested.

This is a general answer. You would need to have your realtor advise you according to your contract.
  • March 26 2012
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Profile picture for Ofe Polack
You probably, could lose your earnest money, but the move could make up for the losses you may experience.  The seller has acted in good faith, taking the property off the market for you and cooperating by offering to correct issues raised in the home inspection, on the other hand you have not completed your mortgage application and now you will not be adhering to your contract.  I also feel sorry for the buyer agent who helped you through the transaction.  Just think how much worse it could have been if you had already purchased the home and then you were informed that your job transfer had materialized!
  • March 26 2012
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Profile picture for Cindy Quinton

If you lose your earnest money, is it really that big of a deal? The seller took their home off of the market and so it is probably the least they deserve. Of course your real estate agent is the one who really loses, as they have spent a lot of time and money (I presume) helping you find a home. Be sure they at least get some kind of referral fee with your new agent in the city you move to...unless you just feel like compensating them for the time and effort they have applied out of your own pocket

I think you can absolutely back out of this deal. Did your real estate agent implies that there is no choice but to buy the house?  What other costs does he say you will owe besides the earnest money and whatever else you have already spent on inspections and such?

  • March 26 2012
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Profile picture for kapyarets
I would never allow that my client lose any earnest money on that stage of the purchase. The seller has a right to hold buyer's funds when there is some wrong doing from the buyer side happens to reimburse the seller loss. When the seller took the property of the market and lost others potential buyers. I would recommend you to talk to the attorney to get help.
  • March 26 2012
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I understand that job transfers are sometimes unavoidable but you will loose your earnest money and I think a gift card for your realtor would be a good idea for all the work she/he put into finding you a home.  Good luck
  • March 26 2012
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Most likely, if you fail to perform to apply for a mortgage loan as specified in your contract, you will lose your earnest money deposit.  I feel sorry for your realtor who did all that work for you, and for the seller, who had his home off the market during this time.
  • March 26 2012
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Profile picture for Matt Hiatt
At the most, you are only reliable for the earnest deposit. I protect my clients, so I cannot reveal my stragies on this one, best to contact your agent.
  • March 25 2012
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