Posted by John Merchant on March 21, 2006 at 22:09:38:
While the S could muddy your credit by suing for Spec. Perf. not many S’s do that these days, as it’s just not worth chasing a “won’t/can’t pay” B…and it’s easier to resell to a viable willing B.
Why don’t you see if you can’t squeeze this lemon into lemonade by selling your rights to the new house NOW, before this goes much longer and gets nasty?
By the way, if they do sue you, don’t just give in, give up and let them take a Judgment…have a lawyer friend file an Answer and contest their right to a J, and you may just win.
It’d be worth paying a lawyer a few bucks to keep them from soiling your credit.
It would be fun representing you on this and your lawyer might find a number of defenses, such as builder’s breach of contract for this or that; builder’s failure to deliver exactly what was promised, etc.
Believe me, I’ve seen flakier defenses get some very good looking lawsuits dismissed or settled for pennies, so don’t quit before you try…NO lawsuit is a “gimme”.
I signed a contract with a new home builder in Florida last year and gave them a small deposit only. In addition, I had one of their lenders “prequalify” me for a mortgage. The home is almost complete, however, I’m not feeling comfortable closing on this transaction as my finances have changed drastically. I do not have the down payment I anticipated I would’ve had toward this deal (my home sold for $60,000 less then what it was listed for).
My question is, if a few lenders turn me down for a loan as applied for, what else can this builder do? They have a specific performance clause that says they can force specific performance at their discretion. But if I’ve applied for a loan with several lenders and they turn me down, haven’t I “performed” what I was supposed to do? Let’s say I’m willing to close, but the banks say no…what can this builder expect out of me other then my deposit?
Re: Avoiding Specific Performance Problems - Posted by Natalie-VA
Posted by Natalie-VA on March 23, 2006 at 16:03:34:
RED,
Does your contract get specific about the financing? I’m not an attorney…I’m a RE Broker.
Our local contract has spaces to fill out exactly how much you’re putting down and exactly how much you’re financing. Then, the financing contingency lets the Buyer out if they can’t qualify for the “specified financing” EXCEPT for the Buyer’s inability to have the cash available for settlement.