FROM THE WALL STREET
JOURNAL
 |
|
AGENTS AND OWNERS
MORE FROM TODAY'S JOURNAL
$ Subscription may be required |
Subscribe Now
PEOPLE WHO READ THIS...
Also read these stories:
An Advertising Feature
 MARKETPLACE
| |||||||||||
![[back to MSN Money]](http://s.wsj.net/img/msnmoney_back_to.gif)
WHAT'S NEWSHouse Talk:
Consider the Risks
If You Renege On a Deal
July 9, 2004
Question: Shortly before the closing date for the purchase of a home, my wife and I decided we would rather try to buy another house. But our real-estate agent warned us of the possibility that the sellers of the first house might sue. Can we back out of this and go for our dream house, or are we really stuck with something we don't want?
-- Albert, Bay City, Mich.
Albert: You probably are safe to back out, but there's no guarantee of that.
Your real-estate agent, Tracy Hites of Bay Area Real Estate, tells me you put down $500 of "good faith" or "earnest" money and signed a purchase agreement. She says she doesn't know what the seller will do but that "there may be repercussions." I haven't been able to reach the seller or his agent.
At a minimum, Ms. Hites says, the seller is likely to claim the $500 you put down.
Ralph Holmen, associate general counsel of the National Association of Realtors, notes that the seller of a home could, in some circumstances, have a valid case for suing a vanishing buyer for any damages suffered. For instance, a seller might argue that your cold feet caused him to lose opportunities to sell the home to other people.
"Most often the seller walks away with his earnest money and that's pretty much the end of it," says Mr. Holmen. If the housing market in your area is strong, it's going to be much easier for the seller to find another buyer than to chase you through the courts.
One consolation: You're hardly alone in changing your mind. Diane Saatchi, regional vice president of finance for the Corcoran Group, a real-estate broker in the New York City area, says that more buyers and sellers are succumbing to the Hamlet syndrome. Years ago, she says, once the buyer and seller informally agreed on a price, the deal almost always went through. Now, she says, such agreements survive to closing only about half the time.
In any case, you may need to find a new agent. Ms. Hites says she's worked with you for eight months and shown you more than 60 houses. "I think I'm going to cut my losses and walk away from these people," she says, though she adds that she hasn't made up her mind.
Write to James R. Hagerty at bob.hagerty@wsj.com
|
|
 |
||
|
| ||
