Consult a lawyer for the specific laws (and local practices) that apply in your area.

I was laid off in October but have pulled together a bunch of consulting clients and have the income from the building so there's money there but not the w-2 income that the banks like.

Breach Of Contract: If Landlord/Seller shall rent, accept an offer for sale or purchase, cancel or in any way breach this agreement before the expiration of said agreement with the original Tenant/Buyer, this contract shall revert to a consultation and a consultation fee of $1,000.00 shall be immediately due and payable.

this can vary state to state...make sure that the lender will consider the short sale as 'paid in full' and will not come after youe friend for the deficiency.should also be noted that they need to consult a tax advisor as the irs will send them a 1099 for the forgiveable amount. it would be taxable as income.

I think that no matter what happens, you may wish to consult an attorney.

RJ, thanks for the explanation.J, I agree with what you say and that is the approach that I would like to take but I consulted with an appraiser and a loan officer and they tell me that any mention of a roof repair/replacement on the contract will cause the FHA appraiser to require the replacement before approving the loan.

I hate being on this thread and people say "consult a professional CPA or lawyer".

I am refering to fee as "consulting fee" or "referal fee" .

I'm not a lawyer and it's always best to consult with one, but my understanding is: Once you have a property under you have what's called an equitable interest in the property and can therefore market the property however you so choose.

My fear is that by backing out now they will just repalce me with another buyer, then I lose my dream home.Does it make sense for me to hire an attorney for a consultation on what I should do?