If we just recently started the process of buying a house, can the seller back out of the deal without any penalties?
Question Details:
We were to close on 14th of this month but because of appraisal issues, we have had to put the close on hold. The appraisal brought up a need to fix a garage, so we used our own money to buy supplies and fixed the garage in 2 days. The appraiser has failed to get his information in, so closing has been put on hold until he does. The seller is threatening to back out because closing has been delayed. Can he do this without any penalties? What happens to our earnest money, etc?
If there was a closing date in the contract of sale, failure to close by this date could mean that you are in breach of violation of a material (or important) term of the contract. If that is the case, then the breach by you, in not closing on time, could give the seller the right to terminate the contract while keeping the deposit or earnest money. You need to see what the contract said about inspections and inspection contingencies--what rights did you have in terms of delaying closing or even backing out of the deal at your option? Unless you had some right to delay the closing, you could have difficulty. You should retain an attorney to evalute the home sale contract and situation and help you work though this situation. Good luck.
