Results 1 to 4 of 4
  1. #1
    Join Date
    Jan 2015
    Posts
    2

    Default Seller Canceled Real Estate Purchase Contract While in Escrow

    My question involves real estate located in the State of: Hawaii

    Last week we had signed a purchase contract agreement on a condo in Hawaii and sent the initial down payment to the escrow company.
    My real estate broker just phoned me and said the Seller is going to cancel the contract.
    Here is the email the Seller's real estate agent sent our Agent ;

    "It has come to my attention that the seller cannot give a clear title to the property, due to the fact
    that she owes $xxx,000 to her mortgage and with the sale of $xxx,000 she does not have money to
    bring to the table. The seller was under the impression that she could sell and continue paying
    the balance off, she said she did not know she had to come up with the entire amount all at once."

    So the agreed upon price is less then what the seller owes the bank on the condo.
    The bank is not giving her clear title until she comes up with the difference.
    The Seller does not have the funds to do this - so they want to cancel the contract.

    My realtor is saying

    "Because the Seller cannot deliver to you clear and free title, she is in need to cancel the Purchase Contract.
    But Under 0-1, 2nd paragraph if in the event Seller is in default for failure to perform Sellerís obligation, Buyer may
    a) terminate PC and bring any action for damages for breach of contract or
    b) seek specific performance of this PC."

    We have spent about $400 on this transaction - between the condo inspection - and wire transfer fees.
    To say the least we are very upset about loosing this transaction.

    How should we proceed with this?
    Do we need to talk with a lawyer
    OR
    Should we just aks for coverage on our expenses - and put this one behinds us?
    Was the Seller's real estate agent neglectful - for not picking up on this issue?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Seller Canceled Real Estate Purchase Contract While in Escrow

    If you deem it sufficient, you can ask the seller to reimburse you for your out-of-pocket costs.

    Given what you have told us about her financial situation, I'm not sure that she's a good target for a lawsuit. Let's say that you sue for specific performance -- without a contingency that would allow her to back out of the contract, odds are you'll win, but that won't make the mortgage debt go away. Who would pay the difference between your agreed purchase price and the balance of the mortgage, such that you could get the mortgage lender to release its lien? If she's strapped for cash and upside-down on her mortgage, you may find that a money judgment is difficult or impossible to collect, and you win a significant award you may simply push her into bankruptcy. Even with a small claims case for $400, you may find that she's not particularly willing or able to pay.

    It's not the fault of the seller's agent that the seller didn't understand how mortgages work.

  3. #3
    Join Date
    Jan 2015
    Posts
    2

    Default Re: Seller Canceled Real Estate Purchase Contract While in Escrow

    Thanks for the response

    After sleeping on it I think we are just going to put this behind us - and absorb the costs.
    The Seller sounds like she entered into the transaction on good faith - but was ignorant of her financial responsibilities.
    Although she is ultimately responsible for this mess - I do not feel right about dinging her for my costs - as she obviously is already in over her head financially.

    PS
    I will talk with my real estate agent later today - as it has been over 24 hours since this news broke - and we have not seen the cancellation contract yet.
    The Seller is not living in the condo - and it currently it is not rented out - and she is pay $750/month to operate this condo.
    So she has an issue here.
    Possibly she is working with the bank to make this work - but I am not holding out much hope.

  4. #4
    Join Date
    Oct 2006
    Posts
    16,263

    Default Re: Seller Canceled Real Estate Purchase Contract While in Escrow

    Quote Quoting path1023
    View Post
    Thanks for the response

    After sleeping on it I think we are just going to put this behind us - and absorb the costs.
    The Seller sounds like she entered into the transaction on good faith - but was ignorant of her financial responsibilities.
    Although she is ultimately responsible for this mess - I do not feel right about dinging her for my costs - as she obviously is already in over her head financially.

    PS
    I will talk with my real estate agent later today - as it has been over 24 hours since this news broke - and we have not seen the cancellation contract yet.
    The Seller is not living in the condo - and it currently it is not rented out - and she is pay $750/month to operate this condo.
    So she has an issue here.
    Possibly she is working with the bank to make this work - but I am not holding out much hope.
    What you are describing is really not uncommon. While the whole "ignorance of the law is not an excuse" is relevant, the reality of things is that many people honestly do not have a clue and mess up while having the best of intentions.

    1. Sponsored Links
       

Similar Threads

  1. Purchase Contracts: FNMA Purchase Contract Canceled Because They Did Not Hold Title
    By RomanG in forum Buying, Selling and Conveying Real Estate
    Replies: 5
    Last Post: 09-22-2014, 09:18 AM
  2. Purchase Contracts: Assignment of Contract for Purchase of Real Estate
    By ABunch in forum Buying, Selling and Conveying Real Estate
    Replies: 6
    Last Post: 06-25-2013, 07:26 AM
  3. Judgment Liens: Can I File a Lien Against Money in Escrow Before It Goes to the Real Estate Agent
    By julest1 in forum Civil Procedure
    Replies: 5
    Last Post: 03-28-2013, 05:26 PM
  4. Purchase Contracts: Changing a Real Estate Contract During Escrow
    By need2knowmore in forum Buying, Selling and Conveying Real Estate
    Replies: 2
    Last Post: 03-10-2012, 10:32 AM
  5. Real Estate Purchase Via The Internet
    By jeh in forum Buying, Selling and Conveying Real Estate
    Replies: 1
    Last Post: 04-04-2008, 06:43 AM
 
 
Sponsored Links

Legal Help, Information and Resources