Home Buying in Phoenix>Question Details

tedjorve, Home Buyer in Phoenix, AZ

what happens if I walk from a house I have under contract?

Asked by tedjorve, Phoenix, AZ Sun Apr 6, 2014

Help the community by answering this question:

Answers

18
At best you may lose your deposit at worst they can sue you for specific performance and or damages. Check with a lawyer before just walking away
1 vote Thank Flag Link Mon Apr 7, 2014
Hi,
It looks like you have received great advice below. I also suggest you read your contract and consult your real estate professional or an attorney. I wish you all the best. Tiffany
0 votes Thank Flag Link Wed Apr 23, 2014
What does your contract say? You should first consult with your broker, then a real estate attorney.
0 votes Thank Flag Link Thu Apr 17, 2014
This is a very loaded question..
First of all the best answer anyone can/should give is to contact an attorney that specializes in real estate.

But since you asked here in this forum there are several answers to your question:

- if your contract is the standard AAR contract with no other addendum or language added or subtracted from then these answers may address your concern.

-buyers typically have a 10 day inspection period in which they can get the home inspected for any potential issues. During this time the buyer (only the buyer) can terminate the contract without putting the earnest money at risk.

-if the property resides in an HOA the buyer has 5 days from receipt to review the CCRs and financials. During this time the buyer may cancel without putting the earnest money at risk.

-if the home post inspection turns up something that is material to the buyer and the buyer requests repairs or financial compensation and the terms cannot be agreed upon then the buyer may cancel without putting the earnest money at risk.

-if the buyer can no longer qualify for a loan and is shown by the lender with an LSU and if the contract is contingent upon lender qualification then the buyer may be able to cancel without putting earnest money at risk.

-if all of these conditions have expired and been met and the buyer decides to cancel the contract, the earnest money may be forfeited and can be sued for any liable damages that may have been incurred by the seller. Also, if the buyer was represented by a Realtor and they have a buyer broker agreement, this agreement also may have language that stipulates the buyer may have to pay if a deal is cancelled under abnormal conditions.

-so not only is the earnest money at risk, but there is also potential for a lawsuit by the seller and potential law suit from the buyer's agent.

-buying a home is not like buying a car. it should be a decision taken very seriously and with forethought on if you can perform on the contract or not. Life does happen and sometimes life will throw us a curve ball but unfortunately when buying a home not everyone has to be empathetic to the situation.
0 votes Thank Flag Link Sat Apr 12, 2014
It really depends...Have you spoke with your agent?
0 votes Thank Flag Link Fri Apr 11, 2014
It really depends on whether you are the buyer or seller and what period of the contract you are in. The answer lies in the contract and you should discuss it with your agent and broker. If you feel it necessary, you can obtain legal advice.
0 votes Thank Flag Link Fri Apr 11, 2014
Hi Ted,
Interesting question.
If you are a seller, your options are very limited and you can only cancel if the buyer breaches the contract and does not correct the breach after a 3-day cure notice.
If you are the buyer, you have a few ways where you can cancel and get your earnest money back. I'll be more than happy to help you if you cal, email, or text me with the very specifics of your case.
Please don't hesitate to call/text me at 1-602-326-3552, or reply to this email with any questions or comments.
Warm Regards,
Moe Hegazy, Realtor
Hegazy Realty
Cell: (602) 326-3552
Fax: (623) 242-1040
E-mail: MoeHegazy@gmail.com
http://www.PhoenixBestProperties.com
0 votes Thank Flag Link Fri Apr 11, 2014
Hi Ted,

My first question would be...are you the buyer or the seller? If you are the buyer, you will lose your earnest money deposit and the sellers could bring suit against you for breach of contract; read the contract very carefully to see if there any provisions in it as such.
If you are the seller and are asking as if you are going to allow the property go into foreclosure, again proceed with caution.
In AZ a Trustee cannot initiate a foreclosure unless the payments are behind 90 days or more; with that being said you should most definitely speak with a real estate attorney to know if the buyer can file suit against you for breach of contract.

Hope this helps.

Sincerely,

Lisa Markham
Envoy Mortgage, Ltd.
NMLS# 947738 / AZ# 0921717
520.240.9602
lmarkham@envoymortgage.com
https://lmarkham-envoy.mortgagewebcenter.com
0 votes Thank Flag Link Thu Apr 10, 2014
Contact your real estate professional, if you have one. There are many answers depending upon what your contract states and what has transpired in the transaction. For example, buyers have several contingencies that allow them to get out of a contract and retain their earnest deposit - such as during the inspection period, house not appraising for purchase price, financing contingency, not having a meeting of the minds on repairs, etc.

You can also contact a real estate attorney to have them review your contract and status of the transaction.

Some title companies retain an attorney on staff to review these kinds of situations and can advise you as to what they would do with the earnest money.
0 votes Thank Flag Link Tue Apr 8, 2014
The answer to this question solely depends on the language in the contract. Is it an standard AAR contract, a contract for a new build or even a bank owned property? If you have a real estate agent, this should be discussed with him or her. If you don't have a real estate agent, you best bet is to speak to a real estate lawyer as you are bound by the legal contract you have signed. Hopefully you are within your rights under some due diligence clause in the contract that lets you back out upon further investigation of the home, it's surroundings, crime rate, schools, etc...

Good luck to you. If you need a name of a real estate lawyer, give me a call and I can help you out.

Brooke C. Martin
Designated Broker, Exit Realty Dynamics
Direct: 480-235-0024
eFax: 602-445-7670
BrookeAzAgent@gmail.com
http://www.ExitRealtyScottsdale.com
0 votes Thank Flag Link Mon Apr 7, 2014
The answer to your question is most likely in the document/documents between the parties. Consult with your real estate agent/Broker and then go to an attorney if you have any questions.
0 votes Thank Flag Link Mon Apr 7, 2014
Hello Ted

before you make any decision ;

i would call your Realtor and broker ; talk to them about your reason and see what they come up with .



thanks have a great day
0 votes Thank Flag Link Mon Apr 7, 2014
Hi,
Do you have a Real Estate professional representing you? That individual will be able to tell you your options. If not then I suggest you contact an attorney immediately. Best wishes, Tiffany
0 votes Thank Flag Link Mon Apr 7, 2014
The answer to this question has so many moving parts that it is impossible to answer this without more information. Do you have a Realtor that is representing you? This agent would be the best person to help you with this answer.
0 votes Thank Flag Link Mon Apr 7, 2014
No one can answer this question without reading your contract or knowing the circumstances surrounding your decision to cancel. The offer/contract you signed with the seller spells out what each of your obligations is toward executing the contract and what options each party has in the event of a breach or disagreement. Read your contract, speak with your agent or if you cannot understand your contract seek legal advice.
0 votes Thank Flag Link Mon Apr 7, 2014
You pay for the costs others incurred, including the seller, as a result of your failure to be a good faith buyer. .. Doesn't that seem FAIR?

Unfortunately, you very likely only risk the lose of the money you have placed in escrow. Everyone else will need to eat their loses.

It is possible there are better alternatives to 'walk away' that place you at little risk.
But who know! Buyers gone rogue can get themselves in a mess.
This is a question you need to direct towards your agent, not strangers on the internet.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Mon Apr 7, 2014
If you have removed all your contingencies then your deposit ( good faith money) is at risk. Talk to your agent and explain your reasons , there may be some unusual circumstances that the seller may release you from your contractural obligations but that is at the sellers discretion.

Simon Watson
Keller Williams Realty
(925) 286-7112
(510) 859-4773
BRE 01881304
simon@myrealtorsimon.com
http://www.myrealtorsimon.com
0 votes Thank Flag Link Mon Apr 7, 2014
You could possibly forfeit you deposit.

Have you read what your contract says?
0 votes Thank Flag Link Sun Apr 6, 2014
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer