What expenses am I liable for if I want to back out of a real estate purchase?
Question Details: I signed a contract and put down earnest money of $1,000 for a home. The seller agreedand I paid for a home inspection; there were 13 items on the list that needed to be repaired but I asked the seller to repair only 4. They did. I have since decided that I don't want the house. They refuse to sign the mutual agreement unless I give them an additional $1600. I am not willing to do that. I thought until the day of closing that the only money I could lose would be the earnest money, the cost of the home inspection and then the appraisal. They are threatening to sue me and force me to buy their home. Can they do that?
No, the seller should not be able to force you to buy the home--the courts usually will not provide "specific performance," or forcing a buyer to go through with a contract of sale, in cases like this. What they can do is sue you for any costs or losses they have incurred, due to you breaching the agreement, against which they can apply the earnest money. (Even if they had no damages, they'd still be able to keep the earnest money; but if they have damages which exceed the amount of the earnest money, they can seek compensation for those losses and the earnest money will act as a set-off to their other damages.)
Those damages could potentially include items such as, for example: their lawyer's fees, if any; their own earnest money or deposit on a home, if they were looking to buy another home but now cannot go through with their purchase--or alternately, if they do go through the purchase and now are stuck with two mortgages, two sets of property taxes, etc., the "carrying cost" of the home you refused to buy for some period of time; the cost of any repairs or changes they did make at your behest. They can't get more than their actual damages, but they can recover damages that exceed the earnest money, if they did suffer larger losses.
