Legal Question in Real Estate Law in Iowa

getting out of land contracts

We signed a land contract with the understand ing that the house is to be refinanced by june of 2011. We are currently rebuilding our credit and thought this would be a good way to do it. The house is being sold for 94,000 but is only valued at 75,000. Can we back out of this contract if we can not find someone to finance us because of the overall pricing on this house? What are our options?


Asked on 2/18/08, 5:30 pm

1 Answer from Attorneys
Thomas Moens Moens Law Offices, Chartered

Re: getting out of land contracts

Of course I would have to review the contract to know with any certainty, but you are probably still on the hook. The fact that you agreed to pay more than the house is worth does not mean you can just "back out of this contract." What I would guess will happen is that you will be able to get some amount of financing, and you would be required to come up with the difference between the loan amount you can get and the contract balance from your own savings.

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Answered on 2/19/08, 8:50 am


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