Sorry for your loss and the difficulties with the sale. I noticed you were considering a reverse mortgage as a way to salvage the house and give your dad another income stream and you are second guessing the sale. Reverse mortgages are not often a good alternative and if that is what is driving the desire to breach the contract then it's a probably a bad motivator. I'm not an expert on them but my understanding is they work best if someone has quite a bit of equity and is more advanced in age. This doesn't seem to be the case with your father as he is still of working age and the proceeds you mention from the sale don't indicate a lot of equity. He would end up in a loan after the equity is used up and no longer own the home.
As everyone has mentioned, you are discussing a legal issue, breach of contract, with realtors and lenders on this forum. Legal issues need to be handled by attorneys. Get one if you are really considering breaching this contract.
The other issue I see not addressed fully is the difference in the GFE. It seems a more active conversation needed to be had between your father and his lender so he knew the exact payoff amount. Perhaps, the difference is in the remaining interest or a pre-payment penalty? Perhaps, the new amount is an error or can be re-negotiated with his lender.
It doesn't sound to me that the realtor is responsible for this misommunication. He or she's not the lender or the principal. All he or she could have done is question your father more fully on the pay off amount and it's unlikely he/she would have reason to do so. Getting a pay off amount from the lender or asking your father to do so certainly would have helped but he/she relied on your father's verbal information.
Again, sorry for your loss, be careful of breach the contract without specific legal counsel and I wish you good luck working out this transaction to everyone's satisfaction.
Best Wishes to you and your father,
I don't know perfectly.If you any more question you can ask feel free to reverse mortgage lenders direct.They are very helpful.
The Realtor is NOT responsible for ordering the official payoff demand-that happens once escrow is opened and is part of the escrow duties.
I have ordered demands on deals that were complicated or had unknown prepayment penalties, but only once the seller had given me the go ahead (fees are incurred!), otherwise I rely on the information provided by the seller for the mortgage payoff.
Should the buyers not cooperate, and your Dad still wants to cancel the sale, he definitely needs to speak with a Real Estate attorney who can advise him of his exposure and liability.
Best of luck to you and your family - I feel for you.
With regard to the contract, I think the answer is pretty clear below. Unless the buyer defaults, it is difficult for a seller to get out of a contract without being liable for damages. With regard to the estimate, etc., you indicate that the Realtor wrote up a GFE for an estimated amount he thought he owed. Where did he get that information from? When I take a listing, I get the approximate amount owed from my client verbally (based on their last mortgage statement, any knowledge of prepayment penalty, etc.). We order the formal payoff demand in escrow. This practice is just based on not wanting to have to order multiple payoff demands as the closing date changes, which incurs additional fees to my client. It sounds like this whole situation has been a bit of a mess. I would definitely consult your real estate attorney to make sure that whomever is signing the paperwork has the authority to sell the property per the terms of the trust. I am very sorry for the stress you are going through. I would also make sure that the buyer is performing with regard to the terms of your contract. If for some reason they are not, you can start the process of cancelling them, and that might be the best course so that your father can explore all his options thoroughly.
Best of Luck!
McAllister Homes Real Estate
Sorry for the problems.
Generally the seller cannot back out of a legal contract to sell a home. Your father may be liable for damages or the court may order him to sell according to the terms of the contract. You need to talk to an attorney to get specific details.
The GFE is just an estimate. Who provided the estimated payoff figure? The payoff would not have changed the value of the property. What was the alternative to selling if your father cannot afford the home?
Sellers and buyers need to crunch numbers before they sign...because this may just boil down to he isn't getting what he thought he was getting. In short, he signed up with the wrong realtor....the slick ones are the ones to watch out for!!
Also look at the Listing Agreement and decide whether that realtor was acting in your dad's best interest and holding up their end of the deal....or were they just going after the sale commission?
This would get even better if the listing agent was double ending the deal...
CA DRE 01775528
While the situation you are describing is unfortunate, it stands legally.
I hope that you realize that you are asking if it is o.k. to default on a legal contract between your father and the buyer. Anyone who is not close to your fatherâ€™s transaction and advises you that it is o.k. to break a contract is giving you dangerous information.
Worse, there seems to be some confusion about the Family Trust. (I suspect that you are the one who is refusing to sign.) In any event, that is a legal matter and must be taken up with an attorneyâ€¦along with a legal answer to your original question.
Sounds like somebody made some mis-steps along the way, but I doubt you have a legitimate reason to breach the contract. Of course, you should consult with a real estate attorney, which will unfortunately run you another $1-3K when you're already in a bind.
In any case, if your father can't afford the mortgage, then what good would backing out do for him? Unless you know you can get a lot more money on the house, then he should just take what he can get before he starts defaulting on the mortgage and get foreclosed.