Question:

What are repercussions of backing out on the purchase of a home two days before the closing? ?

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No money was put down. We aren't going to back out, but the seller is really jerking us around and we are closing on the 28th, but she is holding the keys until the 31st at 4:00pm because she planned an auction at that house (behind our back) to get rid of her stuff, on the 31st. We want to know if the threat of not going through with the sale would get her to put her morals in check or if it would be silly because of the real possible repercussions that could come from backing out.

By the way, I know it's not legal for her to be doing this, but we live in a small town and she is "somebody" and we are young, and the lawyer and realtor are a**holes too.

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  1. The repercussions can be severe, if the seller wants them to be.  She can sue for financial damages and specific performance of the contract, and she would win her suit.  Given that she is 'somebody', and the agent and attorney are on her side, I'd venture that others in your small town are the same way, including the local judge and the potential jury, if it comes to litigation.

    While she's not being decent, it might make sense to bite your tongue for these three days, and let it go.  Of course, you could require that you get occupancy at closing, if that is what your contract indicates.  OR, you could delay the closing until she's ready to hand over the keys.  However, we all know what small towns and their politics are like.  Do you REALLY want to cause a stir in Mayberry over a few days ?


  2. You don’t have your own representation???  They’d be more than happy to deal with this for you.

    I grew up in a small town too so I know what you’re talking about, but you’d be foolish to let her have all of those people on your property once you’re liable for anything that happens to them.  Someone trips and breaks an arm, guess whose homeowner’s insurance is paying for that? That’s right, yours!

    You don’t have to let her trespass on your property. If the only agent involved is hers, call her broker if she won’t follow the rules.  If she is the broker, do a Google search to find contact info for your local real estate commission. (I’d probably search country name + state name + real estate commission).  

    Just in the event she’s on the local commission board – small towns are like that – also look up your state’s real estate commission.

    Don’t be afraid to call these organizations, explain the problem and ask what they reccomend you do. And by all means, call the local cops if she doesn’t get out of your house once you legally own it!!  Even if they’re her friends, they’re going to have a hard time justifying letting her stay.

    Oh, and uh, change your locks ASAP. If she’s this nuts, you don’t want her to be able to get back in…

  3. Tell your agent you plan on either moving in on the 28th after closing or you will charge her rent for the three days at 10% over your pro-rated mortgage payment (if the payment, for example, is $1000 a month, 3 days is 10 percent of the month so that is $100 plus another $10 for inconvenience.

    Also tell the agent you want first month's rent (the mortgage payment) put up as a security deposit and that you will return after she hands over the keys and you inspect the property for damage.  If she doesn't like these two contingencies, she can hand over the keys as she is legally required to do on the 28th - No negotiation on these points - As of teh 28th closing it is your house and you can do anything.

  4. Several things apply here.

    1. You say you are closing on the 28th. My guess that means you are signing papers on the 28th. If that's correct the closing doesn't actually take place until those papers are filed at the court house which could be the following day, the 29th, or possibly on the 2nd, which is the next avaliable business day. The seller rightfully has possession of the home until the actual closing (filing at the court house) takes place and keys are normally not given to the buyer until then. Sorry, this is a frequent and painful misundertanding for many buyers.

    2. If you do back out of the deal all that normally happens is you lose your earnest money. Technically, the seller could sue and try to force you to complete the sale but that's really a remote possibility. I once had to back out of a deal so I went through the purchase contract and found that the seller had delayed enough that we were now out of contract (hadn't closed by the date specified). That was my legal "out". I was able to back out without losing my earnest money. In your case you say there isn't any earnest money so backing out at this point shouldn't be a big deal.

    3. You say she planned an auction behind your back. Are the personal items, furniture, etc part of your purchase? She certainly doesn't have the right to sell anything included in the purchase. A word of caution, however. I once bought a home in which the seller auctioned off their personal belongings. In that case that was OK with me but I decided to stop by to see how it was going only to find the auctioneer had a "sold" sign on the refrigerator which was included in my purchase of the home. I salvaged that in the nick of time. It wasn't the seller's fault just confusion on the part of the auctioneer. Once I showed him the purchase contract on the home which specified the fridge was mine, he did the right thing. So, be careful, keep your eyes open.

    Hope all goes well for you.

  5. It is unlikely that a court would see a three day delay as an enforceable contract violation.  Closings are delayed all the time for various reasons - although this one is sneaky.

    There are two ways to go about this - an angry and a calm way.  In the angry way .... You will own the house on the 28th.  If you go through with closing on the 28th, simply get a locksmith to change the locks.  It will cost you about $100.  Any stuff that is still in there is abandoned property and you can dump it in the trash if you want.  And, since it is your house, you could order all people who come there on the 31st away as trespassers.  You could even get the police to remove the seller from your property.

    Now, in a calm way, you could threaten to not go through with the sale, but if you really want the house, why do that to yourself for the sake of three days?  I would simply inform them that they need to rent back the property, and charge them a big amount of rent, for those three days.  Make sure you cover ALL of your expenses - incremental taxes, mortgage interest, utilities, plus any incremental expenses you will incur because of delayed use of your house - meals out, hotel stay, etc.  

    I would also require a BIG contingency held back out of her proceeds of the sales for all items that were included in the sale - such as lighting fixtures, drapes, appliances, and disposal/removal costs for any stuff she does not sell at the auction.  Since her stuff is still in there, you won't be able to do a proper walkthrough before closing.

    If they don't agree to all of your incremental expenses, inform them you have thought through a more angry approach.


  6. charge her rent till she vacates the home and hands you the keys. That is all that can be done and make it high enough that she does just that. She just has no right to the property after closed

  7. WELL, IF she's NOT giving you keys at closing, I would either

    a.delay closing until after her auction

    b.demand rent for each day she doesn't deliver keys at $500/day (settle for $250) because you will be paying PITI for each of those days

    and

    c.change the locks as soon as you have possession

    You have a signed contract and each side is bound. . . .any changes have to be IN writing, and it probably says she delivers possession AT closing, or that she pays rent, which unfortunately may be blank or marked out. . . Talk to your attorney and tell them you are very unhappy and that you want them to make this more fair, rather than to your disadvantage. . . .the attorney you have is representing you, not the other side and should be acting for your benefit. . .push them. . . .now if you signed something giving her permission for this auction, that's different and you have no reason to complain. . .  

    Withdrawing from the deal would be a mess and tie you up for some time to come. . . .you could be sued. . . .what do you mean no earnest money from you guys?

    Steve has some good advice

  8. You have asked this question before.  And the answer is the same.

    DO NOT SETTLE until she has moved out totally and you have inspected the property.

    OR settle on the 28th and she has to be totally out of the property before the settlement and the auction is cancelled or held someplace else.

    If the 28th date is set in stone (ie, lock in expires, etc), then either option 2 is the only choice OR you have the seller pay for any costs to extend the settlement until AFTER the settlement.

    If she is having an auction, I promise that there will be damage to the property.  Parking on the grass comes to mind.

    If you settle, the property belongs to you and the seller CANNOT hold the keys.  Unless you both agreed to this in writing.

    BFD if the seller is "someone".  So are you and age doesn't have any thing to do with it.  You have rights and the seller is taking advantage of you.

    Do you have a buyer's agent?  If so, get them involved. While the settlement lawyer doesn't represent you at settlement, NOR DO THEY REPRESENT the seller.  If the lawyer is putting pressure on you on behalf of the seller, there is a major conflict problem here.

    Step back and protect yourself.

    Bottom line.  Either settle on the 28th provided that the seller is 100 percent out of the property

    OR you delay settlement until after the 31st and the seller is 100 percent out of the property.

    And either way, you inspect the property AFTER the seller is out and before settlement.

    Once you settle, you lose all your leverage; and if there are damages, you will have to take them to court.


  9. If the contract said that possession would occur at closing, then she needs to give up the keys and make other plans for her auction. If she had planned this auction in advance, she should have specified that you would take possession on the 1st.

    If you don't plan to back out, then I wouldn't make any idle threats. That might just upset the apple cart. What about closing on the 2nd instead? That would increase your pre-paids at closing as you would have a whole months interest on the settlement statement, but then your 1st payment would not be due until 11/1. Otherwise the lender may be able to do an interest credit since you are closing within the 1st 5 days of the month. Then your first payment would be due 10/1.

    Did you have plans to move in this weekend? If so, are you going to be out money or need a place to stay? If you can quantify how this is going to impact you, maybe your agent can approach the seller and ask for some sort of accommodation (e.g. allowance for a hotel, rental fees for your truck, per diem rent from the 28th - the 1st, etc.).

    I hope you are able to find a way to make it work out. Good luck.

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