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
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?