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Finding the right apartment in New York City is tough. You have scoured and visited many properties, maybe even placing offers on a couple of homes, only to be turned down or lose a best and final offer. The seller’s accepted your offer, only to reconsider and doubt your purchase. Buyer’s remorse is a commonly known phenomenon; sellers may also have second thoughts. Beware of Seller’s remorse. Your hard work is about to pay off, and you are on the cusp of the American Dream.
When a seller kicks the tires, this creates a fiasco that can cost you money, delay your purchase, or even break your deal. However, before you go through this situation, we outline some cases of seller’s remorse to be aware of a potentially troubling situation and actions you can take if it happens.
Reasons for seller’s remorseReasons for seller’s remorse
While there can be many reasons for a seller to change their mind, several are more common. Seller’s remorse often happens because the seller was not motivated initially and tested the market. A related reason is a seller deciding they were not happy with the price after all and decided to wait for a stronger market.
Other times are a location canceled. Perhaps the seller moved to a new city and realized it was not the right place to reside, or they are dealing with the recent job loss and can no longer afford to move. The sellers might realize that other options available in the open market are not as appealing, particularly when inventory is tight and if the seller; is emotionally tied to renovations done.
There are other emotional reasons, such as not wanting to let go of the memories. Another common cause is separation or divorce. In this situation, one party may intend to return to the “home.”
Looking for a way outLooking for a way out
Sellers have few options once they have countersigned a contract and accepted the deposit, which is good news for buyers. If this is happening to you, check your sales agreement. Ensure no contingencies allow the seller to back out of the deal.
From the buyer’s perspective, make sure you follow the contract, obtaining a mortgage within a specific time frame. Otherwise, you have given the sellers away out. A mortgage contingency can provide you with protection, allowing you to back out of the deal if you cannot obtain a loan within a specified period for the full valuation of the contract price, such as 30 to 60 days. You should adhere to these guidelines or obtain an extension promptly, lest this is used against you. Similarly, you need to follow other aspects of the process, such as getting an inspection if desired within the due diligence period, typically five to seven business days. Delays in signing the contract can allow the sellers time to reassess and back out.
Legal recourseLegal recourse
Once the contract is signed, the seller is in breach of contract if they back out. Assume you have met all your requirements, and no contingencies allow the seller to exit without penalty.
You can hire a lawyer and sue for “specific performance,” which compels the buyer to transfer the property under the contract terms. Should it go that far, attorney and court fees may be tacked.
Furthermore, you can sue to recover “consequential damages,” which are reasonable costs you had to pay due to the seller’s breach of contract. These include expenses for temporary housing, storage, and other living expenses. Before reaching this point, the seller may offer you a settlement to compensate you for your time and expenditures. If you are satisfied with the figure, you may accept it and move on.
Final thoughtsFinal thoughts
In New York, your offer is not binding upon the seller’s acceptance, unlike in some other states. An offer form is filled out, and a contract is sent to your attorney, but both parties are not legally bound until both sides sign a formal agreement with the deposit transferred. During the due diligence period, there is a time lag; either the buyer or seller can walk away from the deal without penalty.
Therefore, if you love the home, you and your attorney must work quickly to finalize the contract, including inspection and an attorney reviewing the co-op/condo’s financial statements and board minutes for the co-op/condo.