Q: I recently signed a purchase agreement with a seller. A week after we signed the contract, the mortgage company sent out a loan denial letter because they couldn’t get the rate that was written on the purchase agreement (the contract was contingent on my being able to get that rate).
I asked the seller to void the contract but they want to sue me for specific performance and have not responded to my request for the last couple of weeks.
Do you know how long they can hold on to the contract? What action can I take to make the seller release me from the agreement so that I can go to buy a different house? Can I make an offer for another house now?
A: If your contract has a provision that allows you to terminate the contract under certain circumstances — such as your inability to obtain financing on terms that you have agreed upon — and you notify the seller as required under the contract, you should not need to do anything else.
Your written notice will terminate the contract and you can move on. If your seller contests your notice, or the method in which you gave notice, or your right to give such notice, you are left arguing about the issue or suing each other to finalize the transaction.
Presumably, you deposited some money for the purchase of the home and the seller has refused to give it back. In that case, you can only force the seller to give you the money by going to court and having a judge order the seller to release the money.
Finally, it’s unlikely that the seller can sue you for specific performance under the contract. A suit for specific performance is one in which the seller would claim that the only way to make him or her whole under the contract is to force you to buy the home. But that would be an unlikely scenario. The seller may have damages and may even lose money if he or she sells the home to another person, but those damages could be obtained without suing you for specific performance.
If the seller has still not given you your money back or has threatened to sue you under the contract, you’ll need to talk to a litigation attorney and sue the seller to get your money back and get the situation resolved.