Home Buying in Rio Rancho>Question Details

Frank And Ni…, Home Buyer in Rio Rancho, NM

How can I get out of my real estate contract? This house will not appraise for what we were buying it for and we can not get a loan for that much.

Asked by Frank And Nichole Durham, Rio Rancho, NM Mon Nov 7, 2011

Bought house through a real estate contract Dec 09. Need to know how to get out of this real estate contract with out getting sued.

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7
Patrick Willard’s answer
To all the out of state agents answering this question with "financing contingency in purchase agreement" please stop. In New Mexico a "real estate contract" is a means of owner financing. Also the question clearly states they bought two years ago. If you are not familar with local terms and customs please don't answer, you give advice that ranges from bad to useless.
This question has been answered, by multiple local agents.
3 votes Thank Flag Link Sun Nov 13, 2011
I think my two colleges are confused about your question. Here in NM a real estate contract is a method of owner financing. The question is regarding a house bought two years ago through owner financing.
Why are you trying to "get out" of your real estate contract? Do you have to relocate? Are you in a situation where you cannot afford the payments anymore? Did the contract have a two year call meaning you have a balloon payment for the balance coming due? It's hard to say what your options are without more information.
As far as "getting out" of the contract and not "getting sued" I cannot and will not give legal advice. You may need to consult an attorney. If do make sure to contact one that specializes in real estate.
Is the holder of your note the person or persons you bought the home through or did they sell the note? I would suggest you contact the owner of the RE contract. If it's a situation of a two year call on the note explain that you can't get financing and see if they'll extend the term. If it's that you can no longer afford the payments see if you can negotiate new terms. If you do not have a call or balloon payment coming maybe you can sell the house. Is the RE contract assumable? If so can it be assumed with or without the note holder's permission? Maybe you could sell with a new buyer assuming the contract or you could sell on a wrap around contract? Your only option may be to sign the property back to them, again depending on why you want or need out.
1 vote Thank Flag Link Mon Nov 7, 2011
If the house does not appraise for the purchase agreement price the sellers either have to lower the price or your agent can prepare a mutual release agreement. The mutual release is signed by the seller and buyer and releases the buyer from the contract. Speak with you agent about this. Also, your purchase agreement is probably continguient on your financing. Good luck.

Cindy Schlee
http://www.cindyschlee.com
Grand Rapids MI
616-558-9595
0 votes Thank Flag Link Sat Nov 12, 2011
Did you have an agent helping you with this process? They should be able to review the terms of your purchase agreement with you and help you understand your specific obligations - beyond that a real estate attorney may be a good call for you to make.

Good luck!
Warmly,
Lila Simpson
Web Reference: http://www.gocompass.net
0 votes Thank Flag Link Sat Nov 12, 2011
At this point it may be in your best interest to consult with an attorney who specializes in real estate, have all related paperwork reviewed, and go from there....
0 votes Thank Flag Link Mon Nov 7, 2011
As I interpret the question, you are already in possession of the home, and are now making payments in accordance with the contract. Upon fulfilling your obligation(s) under the contract, the seller would then deliver the deed.

The buyer and seller each agreed to specific terms and obligations that must be adhered to. The contract should spell out remedies if either party fails to meet the all of their obligations. Review the contract and hire an attorney so you may understand the possible consequences if you are unable or unwilling to continue meeting the terms of the agreement.
0 votes Thank Flag Link Mon Nov 7, 2011
Does your contract give you a "mortgage contingency"? If so, if you can't qualify for the loan, based on appraisal... that will give you the "out" you need, and typically full return of your earnest money.

But check with your Realtor, agent or attorney (whomever you used to help you write and submit the contract), and they'll be able to fill you in on your options.
0 votes Thank Flag Link Mon Nov 7, 2011
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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