Legal Question in Real Estate Law in California
Can a seller who is trying to short sale their home decide to back out at time of loan closing after all buyer contingencies have been removed and buyer has full loan approval and everything is ready to proceed to closing? Seller wants to change their mind because they want to look into a program that will pay them money to short sale their home (if they qualify).
3 Answers from Attorneys
The Seller should be ready to be sued by the buyer.
Sounds like a classic case of breach of contract, but short sales involve multiple parties and agreements, and the whole deal should be reviewed by the buyer's attorney before deciding to file suit. Remedies for breach of an agreement to sell may include specific performance rather than money damages, and the seller could be ordered to sell to the buyer.
It would require a review of the transaction documents to be sure, but it certainly sounds like the seller is in breach of the contract. You should have your real estate agent immediately issue a demand for performance. If they don't know what that is (and they should have done it already) fire them. Then have an attorney review the papers and let you know what your rights and options are. If I can be of further assistance, let me know.
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