Contract signed, appraisal done but now seller is trying to back out

[Warren L.]

Hi, I'm still a beginner in real estate investing but 2 months ago, I signed a contract to purchase a 6 family. We have gone through property inspection, appraisal... The seller has been trying to find excuses to back out from the contract such as saying I didn't send his lawyer the commitment letter in time and not being cooperative with the appraiser. All the issues were solved with my lawyer contacting the seller's lawyer to cooperate.

However, the seller is now calling me saying he needs to back out because he needs the income and made the wrong decision to sell it. After we have spent so much time and effort in this deal, any advice on what's the best way to proceed? Should I bring the seller to court or should I try to get reimbursement to cover all my expenses and time. If yes, what's the amount of reimbursement is typical? Thanks a lot.

Regards,
Warren

[Derek T.]

Sorry to hear the bad news. I would have my lawyer draft something up to let the seller know that the purchase agreement is a legally binding agreement and that they can't just back out. If the seller still decides to back out, your contract will probably dictate the recourse which will probably nothing more than your EMD being returned to you.

The other option is to file a special performance lawsuit. Basically if you win then the seller will be forced to sell you the property at the agreed upon terms. Here is a link to an article about it......

http://www.biggerpockets.com/articles/968-the-5-steps-to-prosecute-a-successful-lawsuit-for-specific-performance

However that would be a more costly alternative. I would only pursue this option if it were a killer deal. Personally I would just get my EMD back and hopefully negotiate a little more for my other expenses but if the seller was unwilling I would just move on. You will get another one soon.