Here is our situation:

Buyer agreed to purchase our home (Illinois) approximately one month ago, with the closing date 60 days later.

No inspection contingency, as we had home pre-inspected. Standard financing contingency, and buyer had a preapproval letter for an amount over the purchase price. Earnest money deposited by the buyer in escrow is $1000.

So...Our agent calls three days ago and says the seller has decided she doesn't want to go through with buying the home. This buyer has not stated a reason, just told her buyer's agent she doesn't want the house, and our agent told us.

We contacted our real estate attorney and he is aware of this but unfortunately is out of town for a number of days.

Can you just decide to "not buy the house"? And if so, are we only entitled as the sellers to the $1000 of earnest money? As we feel we have acted in good faith, and waited until the contract was signed to sell our home to this woman, we signed a contract to purchase another home. There is no way that $1000 will cover our costs (attorney fees, title work already done, not to mention now a second mortgage payment on home number tow)....so are we just screwed now if the buyer decides to not go through with the transaction?

From my short phone conversation with the real estate attorney via phone, he basically said it is a myth that a buyer can just decide not to buy in exchange for giving up the earnest deposit. IF all parties agree to release the buyer from the contract and give us the earnest money of $1000 that is one thing, but what if we, as the sellers, don't agree? Can she be forced to perfom on this contract?

I guess I just wondering if any of you out there have ever dealt with this kind of situation, and if so what became of it. And as a seller, what can be done to protect yourself from this happening each time someone signs a contract to purchase?

Thanks for any info you can give this worried lady.

This happened to a listing of mine. 7 days before closing, the buyers decided they didn't want this house, and they weren't selling their's either. And they were due to close on the sale of their home in 6 days. Their agent explained the consequences, they could be sued by both my sellers, and the other buyers. They didn't care. My sellers agreed to just accept the escrow deposit. And I'm sure the other buyers got their escrow back too. Here's the kicker in this deal: the buyers for my listing had done a note for the escrow deposit. And they never paid. Their agent felt it was best that she pay it, and she did. She didn't follow up with getting their money, and to date, I don't believe she's ever been paid back.

Depending if the contract calls for "liquidated damages" (keeping only earnest $), or "specific performance" (suing for damages). Check also for arbitration or mediation clauses before you can sue.

There's a huge difference between the theory and the actual practice of law.

Sure, you can probably sue for specific performance to make them go through and buy the house. But meanwhile your house will be off the market and you'll be spending lots in legal fees with no guarantee that you'll be able to recover your legal fees or even force them to buy the house. This could go on for months or even years.

Or, you could just flip them the bird and keep the earnest money and put the house on the market again and move on.

Just because you *can* sue doesn't mean you *should* sue. In fact in these cases most people keep the earnest money and move on, because it doesn't make sense to sue. Same goes for mediation, although to a lesser extent.

What do you really want out of this - a legal battle to try and win judgement on a piece of paper, or your earnest money money and your life back?

(By the way the buyers are most likely in "default" as opposed to "breach of contract" which if you read the contract it probably spells out your remedies.)

yes, you can sue, you don't have to agree to let them out of the contract, that is your decision. but by you not agreeing, doesn't mean that they will show up to the closing table.

you can also ask for more money to let them out of the contract because of your expenses.

Goobie78,
Unfortunately this does happen. You can indeed sue for specific performance and will definately get the 1K earnest money.
Why did your agent not write your offer on the new home with a contingent on closing clause?
Have your agent contact the buyers agent and inform her that you do not intend to let the buyer out of the contract as that she should be prepared to close on the agreed upon day. Or pick a dollar amount that you will accept to let the buyer out of the contract. Have you had any other potential buyers on your home?

I recently had a buyer try a similar tactic but this guy used a bogus home inspection to try to get out of buying.

My seller refused to release his $5,000 earnest money and sued him for reimbursement of his actual expenses incurred to meet the buyer's closing date.

I went to court this past Monday as a witness for my seller.

The judge gave my seller the buyer's $5,000 earnest money deposit, awarded him over $8,000 in expenses, AND charged him court costs and my seller's attorney fees; all total around $15,000.

Hold their feet to the fire on this one if you're in the right.

Unfortunately this does happen often, too often, and usually the real estate attorney representing the seller usually advised the seller to let them go on their merry way and do nothing. The attorney will probalbly advise you against suing since litigation can be a long and drawn our process. Hate saying this, but contract are usually not worth the paper they are written on.
PS...Bluff them and make an attempt to keep a portion of the deposit if you can.