@Anonymous wrote:
I have a question that I hope someone can help me with. I am in the process of purchasing my first home. I began the process back in April. I found a house that I feel in love with but someone purchased it before I got my financing in order. So that opportunity was missed. So anyways, we kept on with the house hunting and found another home that we liked. We went under contract back at the end of May. I live in NC by the way. My Due Diligence Period was up on June 23. I have completed appraisals, inspections, and all that good stuff.
Well, today I get to looking and the first house that I initially loved (that was bought before I got a chance to put an offer in) is back on the market. This house was a foreclosure and was purchased and updated and is now for sale again. I REALLY REALLY REALLY want this house. Legally, can I back out of the other contract even though my due diligence period is over. I know that I stand to lose my Earnest Money Deposit but that is OK with me. We are scheduled to close in 2 weeks on June 30. Are there any legal ramifications that I can incur if I walk away?
The first thing that you need to do is read your purchase contract in detail. That should tell you the consequences of defaulting on your contract. Before making any decision that may turn out to be a costly mistake, you should consider consulting an experienced real estate attorney.
In many cases, these contracts allow the seller to seek additional damages if you default for reasons that are not permitted by the contract. That is, your liability may not be limited to your earnest money deposit.
Keep in mind that the damages to the seller in case of default by the buyer can be substantial. When the home is re-listed, the seller may not be able to get the same purchase price that was agreed upon in your contract. The seller will continue to be responsible for the insurance and property taxes until he is able to find another buyer. If the seller is under contract for the purchase of another home that is contigent upon the sale of his/her current home, then your decision could affect that transaction. The seller may have signed a lease for an apartment, and thus may be on the hook for both continued mortgage payments and monthly rent.
