Home Buying in Texas>Question Details

Tmac, Home Buyer in Texas

If I change my mind about buying a house for my son because he got laid off van I back out before closing?

Asked by Tmac, Texas Fri Apr 10, 2009

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6
First Question is: How far into the contract are you ? Once I get the answer to that question then I can answer it for you.....

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0 votes Thank Flag Link Wed May 27, 2009
Potentially yes, poentially no.
It will depend on your contract and perhaps where you are in the timeline of that contract.
If you are in the option period, you may be able to back out for very little money.

If you are past the option period stage, backing out could potentially cost you the earnest money, or a lawsuit. If you were paying cash for the house, the judge could potentially force you to close and pay the seller's attorney's fees. If you were using a loan this might be more difficult, but could depend on where you were in the loan process.

Another idea is to offer the seller a breakup fee, even if it is not called for in the contract.

Best to consult your realtor at this point, their broker, and/or an attorney to help you through your decision.
0 votes Thank Flag Link Sat Apr 11, 2009
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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A rhetorical question: If you could qualify for a loan to buy your son a house and you can still swing the payments, why back out now just because he got laid off? Unless there are issues that are none of my business, he should be back on his feet with a new job soon enough and you've still given him the intended boost into home ownership at a time when he'd probably really appreciate it. In this market especially, a mortgage payment is more than likely going to be less of a monthly outlay than a rent payment.
0 votes Thank Flag Link Sat Apr 11, 2009
GREAT QUESTION:

You need review the executed contract with your buyers agent who discuss performance of buyer and seller. The sales contract governs what you can and cant do and "the what if's" you dont close.

More than likely you loss of earnest, option, inspection, appraisal you have paid for.

NOW if you are during the option period of contract you might be able to "back out of contract" with no penalty charges.

NO MATTER what both parties need amend sales offer and present to title company. Sooner you accomplish this better off you are IF you want cancel the executed agreement.

Lynn911
~ National Featured Realtor and Consultant, Lecturer regarding Credit Repair, Mortgage Loan Officer
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Fri Apr 10, 2009
Are you still in the option period? If you are then you can terminate the contract for any reason. Did you have a third party financing addendum? If your son cannot qualify for the loan because he was laid off and you have a third party financing addendum stating: If buyer cannot obtain Financing Approval, Buyer may give written notice to Seller within _(you fill this in)_ days after the effective date of this contract and this contract will terminate and the earnest money will be refunded to Buyer. If Buyer does not give such notice within the time required, this contract will no longer be subject to Financing Approval. Time is of the essence...

Your buyer's agent should be able to answer your questions regarding your particular situation.
0 votes Thank Flag Link Fri Apr 10, 2009
You need to have your agent and/or an attorney review your contract with you to determine the consequences.
0 votes Thank Flag Link Fri Apr 10, 2009
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