Seller backing out of contract?

Question

Hello everyone, A family friend wanted to sell one of his houses. We did a off market deal with no realtors. We agreed on a purchase price of 240,000. I found a simple online purchase agreement saying he will sell the house for 240,000 and I will buy it with a closing date of June 25th(one month). We both signed it on May 25th. The purchase agreement does not mention anything about backing out of the deal and no earnest money was deposited. The seller received his tax assessment today which has the house valued at 265,000 and in today’s market could probably sell for 290,000ish. The seller now wants to back out of the deal and list it with a real estate agent to get the most he can. Can he back out of the deal since it was an online simple contract with no specific mention of backing out of the deal? I already started the loan process. I have sent multiple documents to the loan company and locked in an interest rate. They are supposed to do an appraisal on the house today. Does the seller need my permission to back out or can he do it at his own will? Will I have to pay for the work the loan company has already done? This is in Washington if that matters.

Jerel Ehlert · Answer

In Texas, it is well established that failure of consideration does not invalidate an earnest money contract. That said, it depends on how far you want to go with this. Even in real estate cases, specific performance can be difficult to get. If this were an arm's length transaction and no extra-contractual relationships to deal with, I would open title if you haven't already and file a memorandum of contract. Explain to the seller that there is no "seller's remorse" and that the contract is enforceable.If the seller is adamant about listing, not much you can do other than sue for breach of contract. A memo will appear in the title report and seller should have to get your release (usually by paying for it). A demand letter from an attorney may produce results without suit. A suit will cost $3-8K (or more), with no guarantee of success.

Jay Hinrichs · Answer

in that market at that price point no staging required house will sell for full price in 3 to 5 days.. with no Earnest money in WA and OR and CA you have no binding contract.. its one of the tenants of contract law in our area. And we don't use attornies to close these deals like you do in SC.... they will bill buy the hour at 350 to 450 an hour you will run up a 5k bill before you know what hit you and will lose anyway..

Account Closed · Answer

Jay is the expert in that market. I believe he is exactly correct. It is absolutely not worth a law suit because you did not pay earnest money.

Jarred Watley · Answer

Hello i'm also in the same situation in TX .Much smaller cash price we agreed on plus its been abandon for yrs . Normal TREC contract with no earnest money but is in process with title company with the fees I've agreed to pay. Suggestions ?

Jay Hinrichs · Answer

just talking about our specific market.. and since I have been buying and selling real estate in the Portland metro area for 20 years and now the price points.. that point is SO red hot.. that's basic starter housing here.. those sell In a heart beat right now.so that's my main point wholesaler have a very difficult time in this market .. AS they bring little to no value.. and are just basically looking for those that are unsophisticated who wont take 5 minutes to ring a broker.. and if the tax records say 295k then it will sell for 325k or better.. Nice friend ripping 100k of this guys equity.

Jay Hinrichs · Answer

in this area you cant just file memorandums and cloud title..

Carl Fischer · Answer

@Jay HinrichsI get your point it may sell in a couple of days like youcan being a sophisticated buyer and seller. I doubt this seller is good at selling based on the discussion -but time will tell. I agree to not fight it even if it was a valid contract. It’s not enough cash for the cost, time and aggravation. I have seen these situations play out where the original buyer ends up doing the deal. Many reasons for sellers remorse-wife says it’s a mistake, real estate friend wants a listing, financial advisor and or accountant says wait till better tax time, etc.

Jay Hinrichs · Answer

Plus open up this buyer for damages.. not solid advice in this particular state.. I understand in other areas this works but not out this way.

Jay Hinrichs · Answer

recorder does not allow those to be recorded without signature from seller allowing it to be recorded..

Jay Hinrichs · Answer

out our way most attorneys in this case will want a 2 to 3k retainer and will blow through it.. and he will still not own the house.time to move on..