Real estate transaction question?

October 27, 2006 4:02 AM

TxRealEstateFilter: What rights do i have if someone backs out of a selling their house after the contract is signed?

Basically, We have a contract on a house in Tx and we are supposed to close on Monday. However they sellers have some kind of issue and now cannot sell their house. Now, my house has been sold and i have to get out on Wed., which is fine if everything went as planned but now i have to find storage and move my family into some kind of temp. housing and start looking for a house again. What rights do i have? What the best thing to do?? Should they be liable for any expenses?

posted by flipmiester99 to home & garden (13 comments total)

This is going to be a difficult question for you to get an exact answer here. This is a straightforward contracts law action and the specific terms of the contract that you used could change everything. In general, it is extremely difficult to compel "specific performance" (force them to sell the house) but you do have a case for recovering your lost expenses. Because pursuing such a claim can get quite expensive, I suspect most sellers get away with backing out without penalty as a practical matter. It is even possible that the contract contains enough wiggle room that you could never succeed in recovering anything. I think you'd have to find a real estate attorney in Texas to look at your contract.
posted by Lame_username at 4:51 AM on October 27, 2006

Time to lawyer up. Did you have a real estate attorney look over the contract? If so, I'd get that person's opinion on how to proceed.

You can sue to perform the contract in many cases. However, that will take time and cash, so you'll still likely need to find interim housing in the meantime.

As for damages, it all depends on how your contract is worded.

Really sorry to hear this has happened to you. It totally sucks. My husband and I had nearly the exact same thing happen when we bought a few years ago. We had to move into a vacant apartment our real estate agent owned for a few weeks before everything got sorted out.
posted by Sully6 at 4:53 AM on October 27, 2006

Lame_username has a good point about that the costs could get very, very steep. My husband and I sold earlier this year, and towards the end of our contract, our buyer started dragging her feet. We talked to our attorney, who said that even though the contract was airtight, we'd better just going after the escrow money. Unfortunately, there's no such consideration for a buyer obviously.

If your sellers are backing out because they could sell to someone else at a better price, filing a lawsuit will prevent them from moving forward with the sale. There's a pretty good article on the here. Good luck!
posted by Sully6 at 4:59 AM on October 27, 2006

Lawyer, lawyer, lawyer... and analyze the likely costs of any actions that you undertake, and make backup housing plans immediately.

Unfortunately, if the sellers are doing something deliberately underhanded, they *may* be doing so with the full and accurate knowledge that any legal action you might take would be too lengthy and expensive to be worth it to you.
posted by enrevanche at 5:13 AM on October 27, 2006

Why anyone would be buying and selling houses without using a lawyer is beyond me. Please don't do that again. Right now, today, hire a lawyer and figure out your options. If you do not know any local lawyers go to Martindale Hubbell and look for lawyers rated BV or AV who do real estate and litigation.
posted by caddis at 6:56 AM on October 27, 2006

By the way, does your contract for sale say that "time is of the essence?" That summary is from Rhode Island and Texas law may differ. (You really do need a local attorney, stat.)
posted by caddis at 7:01 AM on October 27, 2006

Lame_username is right that it is often hard or impossible to compel specific performance of a contract, but contracts for real estate are a common exception to that rule. So you might be able to get the house. But as others have said, if you do have to go to court it will be long and expensive.

I concur with everyone else: get a real estate lawyer to look at the contract. (Your real estate agent should have some references.) It might not be the case that you have to go to court; just threatening to do so might be enough. But this depends on what the sellers' actual reason for backing out is — if they can't afford to move or something, threatening them might not do any good.

(I am a lawyer, but I am not licensed in Texas and I do not represent you. Consult competent counsel.)
posted by raf at 7:21 AM on October 27, 2006

(Your real estate agent should have some references.)

Just keep in mind that unless you are using a buyers broker, "your" real estate agent is representing the sellers, so take anthing they say with that in mind. I would still go to them before going to a lawyer, as they have more ability to help you out with housing and so forth as well as let you know what is going on with the buyers; i.e. will they be able to sell soon or is it time to find another house. In other words, the practical aspects of finding a place to live.
posted by TedW at 8:35 AM on October 27, 2006

"your" real estate agent is representing the sellers, so take anthing they say with that in mind.

"Your" real estate agent also doesn't get paid a dime if the house isn't sold, so they are on your side in this one.
posted by smackfu at 8:43 AM on October 27, 2006

My husband and I had a similar situation when buying our house. It turned out to be an incredibly complicated situation and hiring a lawyer was essential. We ended up getting the house, but we wouldn't have if we hadn't had a lawyer negotiationg for us. I'm happy to tell you what it cost us (in AZ), email's in my profile.
posted by gokart4xmas at 8:46 AM on October 27, 2006

Not flippiant: find another house?
posted by catkins at 10:30 AM on October 27, 2006

You tried to do it yourself to save a few bucks, didn't you? A real estate broker would have advised you to go through escrow so you couldn't get screwed over this way.

Well, now you're screwed. You'll know to pay for sound counsel next time.
posted by ikkyu2 at 10:46 AM on October 27, 2006

Thanks for all the advise!!! Everyones input has really helped.
posted by flipmiester99 at 11:28 AM on October 27, 2006