How does a seller cancel a standard agreement for sale of real estate in PA?

Asked by Clmack, Reading, PA Wed Jul 21, 2010

I signed an agreement of sale which I now want to cancel because I can't find a home to purchase which i can afford. The buyer needs a " gift of equity" to get mortgage financing, which I have decided not to grant (this was not a part of the agreement of sale) due to tax implications and because i can't afford to do this.

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9
Joseph Aster…, Agent, Exton, PA
Wed Jul 21, 2010
BEST ANSWER
If the gift of equity is not part of the original agreement, then you do not have to provide it. If there is a mortgage finance contingency in the agreement, and the buyer doesn't qualify due to the gift not being made available, then the agreement becomes void and the deposit monies are returned to the buyer.

If you're using a standard PAR (Pennsylvania Assoc. of Realtors) agreement, then there are notes in there under "seller default."

If you're trying to do this on your own, and you don't have a realtor - you can contact me - I am here in Reading as well.
Web Reference:  http://berkslistings.com
1 vote
Joseph Aster…, Agent, Exton, PA
Fri Nov 4, 2011
The seller can default by just not choosing to settle. Pennsylvania is not a "specific performance" state; therefore, the seller cannot be forced to sell or settle. However, there is definitely civil recourse, which will likely cover the hardships of staying in a hotel, extended storage, etc.
1 vote
Joe Sheehan, Agent, Exton, PA
Sat Jul 24, 2010
I respectfully disagree with my good friend, Erica Ramus, on this one.

I agree to the extent that If the seller has some control under the mortgage commitment paragraphs in the agreement of sale.

Suppose the seller refuses the gift equity but the buyer is able to secure financing without it?

If the buyer is able to meet all the requirements and contingencies of the agreement of sale, the seller has little recourse but to complete the transaction.

If the seller defaults, he could be sued for non-performance and perhaps be forced to sell the home. He could also be liable to pay some closing costs, including the real estate commission.

In my opinion, the "seller must find suitable housing" contingency should have been included in the original agreement. The buyer may have responded differently if this contingency existed, perhaps limiting out of pocket expenses until the contingency was met or even ending the transaction at that point.

Only in very limited circumstances can a seller back out of an agreement of sale. The ball is pretty much in the buyer's court once the agreement is signed.

Joe Sheehan
RE/Max Professional Realty Inc.
Exton, PA 19341
Office: (610) 363-8444
1 vote
Thanks, Joe. Question. Can a Seller hold liable a listing agent who does not include the "seller must find suitable housing" contingency? The situation was one where we informed the listing agent that we were not sure of where we were going, and would have to find something to rent, but the offer came in in 2 weeks, and we were under contract a week later. As the Seller, I need to cancel the the contract. Inspections are done, and the only remaining out for me appears to be the Mtg Commitment. If that doesn't work in my favor, I guess the only way out is beg for mercy? Perhaps I can remind the listing agent of his inadaquacy for not including the suitable housing contingency, in the hopes it guilts him to convince the other agent to let us out. thoughts?
Flag Mon Mar 10, 2014
Farne, Home Buyer, Reading, PA
Mon Nov 19, 2012
this is a short sale..the buyer and a seller signed the contract for short sale .But the seller changed her mine after reviewing again all the contract agreement.Does the buyer can rent the house while in the process of buying it.
0 votes
Erica Ramus,…, Agent, Pottsville, PA
Sun Jul 25, 2010
I am taking back my prior answer and see Joe Sheehan's argument here.

You should consult an attorney, either way, any time you want to get out of a signed contract. You require legal advice before you make a move. You need to know what your rights and responsibilities are.

Contracts are serious matters. Any changes to the contract after all parties have signed need to be in writing. If the buyer needed seller's assist or gift of equity, you should have an addendum signed by all parties stating that, and accepted by you.

Do you have an agent assisting you in the sale? Do you have an attorney you can call?
Web Reference:  http://move2pennsylvania.com
0 votes
Gita Bantwal, Agent, Jamison, PA
Sun Jul 25, 2010
the best thing to do is to contact an attorney and see if there is a way to get out of the contract. Every thing should have been in writing and signed by both parties so it will depend on your contract and addendums.
Web Reference:  http://www.gitabantwal.com
0 votes
Erica Ramus,…, Agent, Pottsville, PA
Thu Jul 22, 2010
Joe's answer below sums it up. Any changes to the original contract (including needing equity back from seller) should be in an addendum. If not ... they are not part of the contract. If you choose NOT to provide this help then that is your "out".

Do you have an agent or broker? If so, call him and explain why you want OUT and they should help you do this. If not, or if they won't help you, find a good real estate attorney.
Web Reference:  http://move2pennsylvania.com
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Jul 21, 2010
What is your agent advising and what does your contract state as far as backing out--you may wish to protect yourself and consider a consultation with an attorney who specializes in real estate, have all documentation reviewed and go from there--your attorney will be your best source of advice.
0 votes
Terrence Cha…, Home Owner, Allentown, PA
Wed Jul 21, 2010
I am not an attorney nor have I ever played one on tv. You should consult an attorney or at the very least get with your real estate agent.

That being said, if the person can't buy it if you don't provide a sellers assist (I assume if that's what you mean by gift of equity), then the Agreement of Sale would be dead anyway. If the seller CAN purchase your home and all inspections are ok, then you must go through with the sale or YOU will be in default and the buyer could go after you for breach of contract which could end up being very costly.

Terrence Charest
0 votes
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