Seller Trying to Back out of Contract

[John Bell]

I have my first rei property under contract and we are scheduled to close this Thursday. The price agreed was $47,000 plus the seller putting $2,000 towards closing. Today the title company sent the seller and me the HUD statement and the seller is claiming she never agreed to $2,000 towards closing. The contract says $2,000 towards closing in section 12 and the sellers signed it. Should I confront the seller? wait? or call a lawyer? I have the text messages where she agreed as well.

[Doug Smith]

Some time ago, we had a home under contract and, at the last minute, the seller decided that they didn’t want to sell. Now, I felt very badly for them. They had owned the home for many years and were quite fond of it. They provided us with a sincere, heart-felt reason why they no longer wished to sell.

In many instances, I might have simply said, “you know what, cover my costs and we’ll call it even,” but we had already promised the home to a young couple who had already put their notice in with their apartment that they were vacating. They were to be homeless if this deal didn’t go through.

I had a little chat with the seller’s real estate agent using a term called “Specific Performance.” The term simply means exactly what you think it might. The court not only forces the party that is backing out of their obligation to perform, but the offending party also is responsible for court costs and, the big kicker, all real estate commissions as well. Once the seller understood that the remedy for us was for the seller to be forced to turn the property over under Specific Performance, but also cover all attorney’s fees and court costs, they begrudgingly moved forward.

If you do enough deals, you will eventually run into this situation. Fortunately, there is a remedy for you in the eyes of the law.