Thought I'd run this legal situation past the DG family, for some helpful feedback.
I signed a Purchase Agreement in April to buy and assign a fixer-upper from a seller/realtor after he did a short-sale on it. Our PA had many short-sale provisions and contingencies, except a subject-to clause in case the property wasn't short-saled.
The seller decided to pay the mortgage balance out of pocket instead of doing the SS. But he didn't file an addendum invalidating SS terms when he made that change. Since he's a realtor/seller, not sure why he let that go.
The PA allowed me as buyer to terminate my offer by the closing date, 5/28, if the seller didn't provide certain documents. My atty asked his atty several times to provide a signed release from Bank of America to be able to close. With unresolved SS and title issues a few days before closing, my end-buyer backed out. We had no signed release from BOA, so I decided not to close. There were better deals out there.
Now, the seller/realtor's withholding my $500 EMD and threatening to sue for breach if I don't close in 25 days. His atty says the property wasn't short-saled and our contract isn't subject to SS terms. My attorney says no. I exercised buyer rights to cancel, within contract terms. It was the seller's responsibility to amend terms when his situation changed.
If the attorneys can't work things out and the seller sues after 25 days, my LLC protects me. But legal fees could exceed the contract sale price.
It's gotten messy fast. Any thoughts?
The Eastlake Group, LLC