gabby20,
I am sorry to hear of your predicament. This certainly makes it
difficult for you to proceed with the purchase of the new home you
desire. What a disappointment!
There are several issues involved here. It is much more likely that
the specific terms in your seller's and buyer's agreements will be the
deciding factor, rather than general Maine real estate law. Since I do
not have a copy of your contracts, I will try to cover all the
different possible scenarios.
1) If the company who agreed to finance this couple's mortgage is no
longer willing to provide either one or the other of them with the
mortgage (and I suspect this is extremely likely, as a couple in the
midst of a divorce is a high financial risk), and if your sales
contract with them specifies that they can back out of the contract if
circumstances beyond their control make the purchase no longer
possible (i.e., their financing falls through), then they are able to
do so.
Further, if your contract with them specifies that in such a case they
are entitled to be refunded their earnest money (deposit), they will
get the money back, and there is probably not anything you can do
about it. If no such refund clause exists, it is likely that you will
at least be able to keep their deposit.
Bear in mind that the legitimate "circumstance beyond their control"
here is not that they are deciding to get a divorce and backing out of
the purchase, but that the finance company is refusing to approve
their mortgage because of the impending divorce.
2) If no such "back-out" clause exists, or if their financing company
is still willing to provide them with the financing but they do not
want to go ahead with the purchase, you can sue them for
"non-performance", i.e. not following through with their promise to
purchase your house.
HOWEVER, before you file such a suit, you should be aware of the
consequences of doing so. If you file for "non-performance", you are
essentially suing them to force them to go through with the purchase
of your home.
The outcome of such a suit might be that they are indeed forced to
purchase your home. If this were to happen, you could not have sold
the house to someone else in the meantime.
Or -- and this is probably more likely -- the suit will not be
resolved in your favor. Your house will not have been sold, and you
will have just lost all the time, money, and effort you spend spent
pursuing the suit -- and the total of these things could be quite
SUBSTANTIAL.
Either way, until the suit for non-performance has been settled (and,
depending on the state of your court system, as well as other factors,
this could take upwards of a year or even MUCH longer), your house
will be effectively "tied up" in the suit. Furthermore, the house you
want to buy right now will almost certainly be long gone by then.
Even if the couple ends up being forced to buy it, settlement probably
won't happen for months or years from now, and until then, you won't
be able to access any of the equity in your home to use to purchase a
new home.
If they don't end up buying it, you will not be able to put your
current home back on the market until that decision has been reached
by the court -- probably months, or even possibly years, from now.
For these reasons, suits for non-performance are rarely ever pursued.
The seller instead chooses to cut their losses and get their home
immediately back on the market, in hopes of making a speedy sale to a
new buyer, so that they can proceed with their own purchase of a new
home while the home they have chosen is still on the market.
3) It is likely your contract with the people selling the home you
want to buy includes a "contingency" clause that depends on the sale
of your present home going through. If your contract with them
includes a "back-out and refund of deposit due to circumstance beyond
your control" clause, you will be able to get your deposit back from
the sellers because the sale of your current home is not going to go
through.
It is also possible that your contract with them includes an "out" for
them; that is, if you are unable to close with them by a certain date,
they have the right to break the agreement and put their house back on
the market for another buyer. Again, depending on the terms stated in
your contract with them, you may or may not be able to get your
deposit back from them in this instance.
You do not say whether you have an agent representing you on either
the sale of your current home or on the purchase of your new one. If
you do, and your agent is competent, they should be able to walk
through both contracts with you and tell you whether you can keep the
couple's deposit, and whether you can get your own buyer's deposit
back.
If you do not have an agent, and you are having a difficult time
determining which of the circumstances I have discussed are covered in
your contracts, I recommend that you hire a real estate attorney to
sit down with you and walk through those contracts with you, so that
you know for sure.
Please remember that I am not an attorney, nor am I a real estate
agent.
However, my personal recommendation here would be for you to release
your buyers from their contract with you, keeping their deposit if you
are entitled to do so.
If you have the funds available -- and your financing company will
cooperate -- go ahead and purchase the house you want without waiting
for yours to be sold. If you do this, you will need to be financially
capable of making payments on both homes for several months.
If not, set up a personal meeting with the people who are selling the
house you want to buy (including your and their agents, if you have
them). Explain the situation, and that you REALLY want to purchase
their house, and that you would like to work something out. You may
find that they are still willing to work with you.
If the contingency time limit expires, and they are not willing to
wait any longer, make sure to get your deposit back if you are
entitled to do so. (Even if you are not so entitled, they may be
willing to give it back to you anyway, depending on their own current
circumstances.)
Finally, get your house right back on the market and market it
aggressively, so that you can get your plans to purchase a new home
back on track.
Before Rating my Answer, if you have questions or need more
information, please post a Request for Clarification, and I will be
glad to do what I can to meet your needs.
I hope that this information provides you with the information you
need to decide how you will proceed from this point.
Regards,
aceresearcher |
