What to do if we are being sued for specific performance regarding a home purchase?
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What to do if we are being sued for specific performance regarding a home purchase?
We agreed to purchase a home for $339,400. We did not qualify for a loan. The property just sold for $292,175. The seller and his attorneys have calculated that we owe him $42,527. This amount includes the difference in selling price, taxes, repairs, andhis miscellaneous expenses. Additionally, the agreement was written on a “CA Association of Realtor s” form. What is our responsibility?
Asked on September 3, 2011 under Real Estate Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Your responsibility is, unfortunately, most likely to pay the difference between your contract price and the sale price. You contracted to buy a home for $339,400; unless that contract of sale had what's called a "financing contingency," or a term stating that you could terminate the contract in the event you did not get financing, the fact that you did not get a loan does *not* affect the validity or enforceablity of the contract. Even without a loan, you were still obligated to buy the property for the sale price. When you breach a contract, the other party can recover the damages they thereby suffer--in this case, the difference between what you were obligated to buy the home for and what they were later able to actually sell it for. It would be worthwhile for you to consult with an attorney in detail to see if you have any defenses, but there is a good chance you are liable.
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