Seller Breach Of Contract

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I was hoping to get some advice on my sellers breaching our sales contract. My partner and I had purchased a house for $125K cash with a one week escrow. Buyer was asking $179K but took our offer over others because it was all cash. We estimated fix up cost at 10K and had done our comps and talked to a few agents who estimated that is would go for 190-200K after fix up. After the contract was signed the sellers agent advised seller not to sell because the price was too low. They actually sent us a copy of the letter stating this to their seller. The seller and the agent/broker had an argument and the seller fires the broker. After this occurs the seller attempted to notify us and the title co. that she was not going to sell us the property. We advised the seller that she had signed a contract and we intended to hold her to it. At closing seller agrees to sign the closing paperwork and does so.
Sellers husband who resides in another state says that he will also do so. Seller then advises our agent/broker that she has no intention of selling us the house and has told her husband not to sign the paperwork. She is now suppossed to be leaving the state to go join her husband.
Unfortunately this happens to be me first REI deal and I do not have a Real Estate Attorney who can handle this although I did contact several today and will meet with them tomorrow.

What do we do? What are the ramifications of her and her husband breaching the contract? Our broker and the title co. employee say that they have never seen anything like this. We were planning on making some good money on this deal and would like to pursue whatever actions we need to take. Any advice would be helpful. I know that I must talk to an attorney for real legal advice but any hints would be helpful...



  • earl4519th August, 2003

    Sounds to me like she can get out of it via her being mentally incompitent.

    Perhaps you now know why her husband is in a different state. (smile) What's he like, have you talked directly with him? The monies are in as I understand it and you were just waiting for his signature since you already had hers. She seems to be having a severe panic attack, can you perhaps work with her and calm her feelings. Sounds like she has a very strong emotional connection to her home.
    Seems to be very insecure.

    This is one for your real estate transaction memoirs.

    Keep us posted on further events on this and good luck Ernie.

    Joan [ Edited by earl45 on Date 08/19/2003 ]

  • Ashby119th August, 2003

    First I would go after the realtor w/ the local dept. of commerce or licencing agency. Purposefully advising your cient to breach a legal contract is a violation of the code of ethics & will get your license jerked. Then run, dont walk, & get a good
    R.E. attorney & notify them by attorney of your intention to sue their butts off if they breach. this should give them a reality check. good luck!

  • shappee19th August, 2003

    And I thought it was just me!!!

    I have a similar situation occuring right now and everyone was telling me they'd never seen anything like it. Seller signed contract, then breached it several times before closing. I, being the nice person that I am, bent over backwards to accomodate them each time. Then, we get to closing and seller decides that he wants more money! He gets up and storms out in the middle of the closing. Here's the kicker!!... I was buying this property Subject To. He completed just enough of the documents to give me legal title but didn't take his note back! I'm sorry, but this is just pure irony to me. Anyway, I tried everything to settle with him without attorneys but he's dug his heels in. After discussing it with my attorney what we've decided is this. 1) I clouded his title with an affidavit of contract on the property. 2) My attorney is writing his a "come to Jesus" letter advising him to complete the transaction or lose his butt in court - or- 3) He can reimburse me for all expenses incurred to this point. I don't know that it would really be worth it to sue him but I'm gonna make him believe I will. If he doesn't concede and I don't sue him..... his title is clouded. And if he wants me to release my affidavit, I will be happy to do so for reimbursement of all of my expenses. In the mean time, he won't be able to close on selling his house (which he has already listed with a realtor), and if he goes ahead and moves where his family has already moved to, he will likely default on his loan and lose the house to foreclosure. I don't like being a hard-butt, but this guy has pushed me too far! Hope this helps.

  • oo7icu19th August, 2003

    Good afternoon, I recently had the same problem and this is how I handled it. I had a seller agree and sign to sell me his property, he backed out (at the closing table). I immediatly went to the court house and recorded an affidavit of interest and memorandum, make sure you put a dollar amount on this. This will cloud the title, (putting a lis pendens )making this property unable for them to sell. Then when they went behind my back to sell it, they had to call me to release the lien. I did so for 5k, and we both ended the dispute. I would however use a real estate attorney if you can afford one. I lucked out and did this myself and it ws a chance I took. These people should be aware that these are binding contracts they are signing, and no one is making them do so at gunpoint. I wish you the best of luck.

  • gold19th August, 2003

    You cannot make a seller sell if they do not want to sell, even if they have signed a contract. However, they MAY be liable for liquid damages. Best to consult an attorney.

  • ram19th August, 2003

    This is a great example of why husband & wife should both be on the contract when the property is their primary residence and could bear emotional attachment...$100-200 in legal services are called for well as negotiating a win-win scenario for all parties from the start...these situations can be avoided in all but the most rare of circumstances by closing asap for all cash without delay (consternation).

  • Mkognito20th August, 2003

    I won't go into all of the gory details, but a very similar thing happened, to me, too. In short, we signed the contract and started the escrow work, and then the seller's agent took another offer/contract, and cancelled mine. I Had to get an attorney, who filed a Lis Pendens with the court. This prevented them from selling the house to anyone until I removed the Lis Pendens. My atty started by sending them a demand letter, advising/forcing them to come to mediation/arbitration (which was a standard condition of the contract). If they didn't show or still refused to cooperate, we could take them to court. My atty says 9 times out of 10, they'll resolve the issue with you because they don't want to go to court. Not only is a court trial expensive, but in addition to them having to sell you the house as agreed upon, they could also be sued for damages and pay all atty fees; and more expensively, they would have to pay for the difference in money you'd have to pay in interest for the 30 year life of the loan (if the interest rate changed from the day you signed the contract till the day you actually closed.)

    It was a stressful process, but in the end, I prevailed, and they sold me the house as originally agreed. I probably would've not even gone through with it had this not been a property I knew was a good deal (it was an underpriced property in an area of Calif. with about a 30% yearly appreciation).

    Since they capitulated before going to trial, I didn't get back my atty fees. I could've taken them to Small Claims court to get back my fees and probably would've won, but I decided to just let that part go.

    Good luck!

  • sg257620th August, 2003


    Are you in California? If so can you give me the name of the attorney you consulted with please? I have a similar situation and need help...

    Thank you


  • Mkognito22nd August, 2003

    Yes, Sha-- I'm in Southern California. I'll e-mail you with the info when I get home tonight.

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