Legal Question in Real Estate Law in California

short sell or foreclose

We are short selling our rental property at a loss of 65,000 dollars. We 100% financed two different loans and the second refied a year later. I spoke to an attorny an he said to foreclose and back out of the short sell. Escrow will close next week, and the realtors and buyers will most likely sue. We have no clue what to do please help. Thank you.


Asked on 4/21/07, 3:28 pm

1 Answer from Attorneys
Daniel Harrison Berger Harrison, APC

Re: short sell or foreclose

I am missing some information. If you sell, will you be contributing $65k of your own money to pay off the current mortgages?

Generally speaking, if you back out of a real estate transaction without an effective legal excuse, the buyer can sue you for either specific performance (force you to sell the property to them) or for breach of contract. The measure of damages for the breach of contract action will likely be the difference between the fair market value of the property and the price the buyer had agreed to pay. In some declining markets, damages can actually be nonexistent.

We practice real estate law out of Newport Beach and can help you if you're interested. Feel free to email or call.

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Answered on 4/21/07, 7:12 pm


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