HI:

I have a contract with a buyer to purchase my home and he stated in it that he would give me $20. as earnest money - he has given me none - is this a binding contract?

This is a long story but my house went into a sheriff sale and I had 12 days to redeem, because I got this investor before the 12 days expired, I was out of town when he signed the contract and I gave a letter to my neighbor to sign for me and he ended up putting the contract in his girlfriends name and gave me no money as a down pay't even though the contract stated the $20. was given. I had gotten an extension to my redemption period from the courts and there will be no more extensions, this buyer wants to close on the day that this extension expires and that can not happen since I have to bring the check to the Sheriff's office with my ID before 4Pm on the 30th Nov.

I was under considerable duress over this and he has taken advantage of me and I spoke with him at my home about 12 days after he signed this contract which I did not see until 2 days after he made it and sent it to the courts that he needs to give me earnest money of at least 3-5K for a $200,000. home - he said that he would give it and he never did!

I have a another buyer who is paying cash, has given 5K to a real estate agent and gave supporting documents that he has the cash to buy and he would have closed last week and we have another date on the 13th Nov set up - can I go to closing with him without suffering any repercussions from the 1st buyer?

Thank you very much...I must get an answer within the next 48 hrs! I am about to lose 113K of my own money that I put down on the house 3 years ago to buy it!

Jollyranger

Marriedguy

I would contact a real estate lawyer...Sounds like you are talking about sellers contract. Which is crazy because you mention that the buyer is the one that drafted it. This contract is normally drafted by the seller and it has language that states if there is no earnest payment there is no contract. Without seeing the contract cant say that it is legal. Also if it was a sellers contract it is binding

excon

Hello jolly:

The reason there's earnest money in the FIRST place, is to make the contract LEGAL. If you have a contract that this guy has NOT fulfilled (and he hasn't), then the contract is NOT binding.

Go with the second offer. If the first guy gives you any trouble, tell him he could have avoided it for $20. If he sues you (and he probably won't), hire a lawyer.

excon

jollyranger

To Married Guy and Excon:

Thank you for responding to me. The buyer wrote up this contract, I was in FL when it all took place, as I was within hours of losing my home back to the mortgage company that bought it back at the Sheriff Sale. With this contract the Judge ordered an extension til Nov 30th of the redemption period. This guy put his girlfriends name on it instead of his, he has given me no money, he hadn't given me the way that he was going to purchase it and said that he wanted me to get out of my home last w/e from 12-5 so he could hold an open house and if he sold it he would give me another 5K, he told me that he would rather go to settlement with a buyers money than his own!!!! And his attorney told my son Fri that if we don't close before the deadline of Nov 30th they will get the mortgage co to extend it - from the Superior Court of NJ my order says that there will be NO more extensions!! So, am I good to close with the 2nd buyer and what are the chances that if he were to sue me that I would lose in court? I am almost 59 and about to lose 113K of the only money that I had in the world! Thank you

excon

Hello again, jolly:

I haven't changed my mind. The second guy can close. I dunno if the first guy can. He sounds REAL flakey. You can't risk it. GO with the second guy.

Not only is that the best course of action for you. It's also the legal one. I haven't changed my mind about the legality of his contract, either. I believe it is NOT enforceable. Without boring you with legal mumbo jumbo, in contract law, earnest money is "consideration". Without consideration, there is NO contract. He didn't give you earnest money - ergo - there's NO contract. It doesn't matter whether he said he would and didn't. What matters is that he didn't.

If he sues you, then he does. Better him suing you, than losing your $113K. Even if he wins (and I say he won't - but I'm not a mind reader and I don't know what he wrote in the contract), he'll only win the difference between what he could have sold the house for and what he's paying you. I'm sure that's nowhere near $113K.

excon

jollyranger

Thank you again. The problem is that he is buying my house for only 200K and it is worth about 320K. His lawyer said today that they would give me a letter stating that they will close on the 20th - that was over 4 hrs ago and close of business today is in 2 hrs and I have heard nothing back! Everyone has said that it is an illegal contract, but his lawyer said that it is legal since the Judge extended the redemption period to Nov 30th! However, the document also says that he gave me $20. and he NEVER did!

The 2nd buyer and I want to close and but we are hoping for this letter from the 1st buyer to get more proof should he sue! What do you think now? Jollyranger......Oh and I am moving to FL, if I am down there can he still sue me?

Fr_Chuck

first you had someone else sign for you, that is not legal in the first place.
Next if there is no money given, then there is no binding contract.


And of course "his" attorney will tell you anything, the fact is you committed a fraud by having someone else without legal power of attorney sign for you and alot of other problems in this entie deal.

The fact is you also agreed to sell it to someone so you would not lose it, you agreed to sell it for alot less, now you can sell it for more money so you want to cheat the first person out of it.

I hope you can live with yourself, if you want to cheat someone who helpoed you from losing the home.

Legal Bod

What a mess. No one can sign for you. You need to sign the contract.
The $20 dollars sound to me the consideration fee [an important legal word] for an option agreement. If it was not paid to you then the cntract is void. From what you say this contract is not binding. It would help if you posted the buyers contract on here so we can read it.

I like his house step sale idea, sorry but the guys smucking you. Your the smuck. Lets know the latest news?