Profile picture for user81706204

What are our financial obligations if we walk away now?

We're at a point where our closing has been pushed back with no exact dates for the next one. We were ready to go until there was a problem with the Title.  We found out the seller needs to get a partial release on their property, now hearing it could take anywhere between 30-60 days. We're pretty much over this whole process and the house because of so many other variables.  Is it to late to walk and take our deposit back? What kind of obligations do we have to the lender at this point?  The seller already agreed to pay for our rate lock extension, but that is soon expiring.  If we cut our loses now, how much will that be?
  • October 03 2013 - US
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Answers (3)

We do not know what your sales contract says.  It's hard for us to give specific advice.  Are you working with a Realtor?  Perhaps they can offer some suggestions.

The first question is How bad do you want the house?  If you want the house then you may have to ride this out.

We also don't know the nature of the partial release that is needed.  I had this happen on a home that had passed down to a child through an estate.  Grandmother to mother to child.  Back when the mother was left the house one other sibling was not contacted nor did they sign off on any claim.  This created the need for a release on the child who was willed the property from the mother.  The current owner was able to escrow from his proceeds an amount estimated to be the value of the relatives share. The house closed.  The title issue was cleared up after closing.

There may be options but you should discuss the situation with an attorney.
  • October 03 2013
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Profile picture for Tesa Noonan
Depending on the terms of your contract, you should be able to serve some sort of notice to the seller to perform. This (in CA) is typically a 48 hour "fix it" period and if they can not fix the breach, you may cancel and get your money back. You should not morally or financially owe anything to the lender as these things happen.....feel free to speak with your lender and let him know how you feel. Your agent should be able to explain this to you. You are certainly not obligated in any way to "float along" forever. Ther terms of the contract are quite clear as to the close of escrow date.
Good luck!

Tesa Noonan, REALTOR
  • October 03 2013
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Profile picture for Outer Banks N C
You are in an unclear area now. Unless there was something in the contract saying "Time is of the Essence" and a date, you could float along as long as no one is purposely delaying the closing. Title issues come up and must be dealt with.

Your next step is to talk with a lawyer because you are going to make someone mad, incur a loss of some degree and argue over escrow money when you break that contract.

good luck

tim
  • October 03 2013
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