I entered a land contract for the period of two years. I signed a purchase agreement stating what the final cost of the home will be. I need to get a loan to buy the house. However, the housing market has tumbled badly and the house is no longer worth what it was appraised for when I signed the contract. There's no way I'll be able to get a loan for the original amount without putting down a ton of money that I don't have. Will I be sued for refusing to buy the house even if it drains me of every penny I have? The worst part is, my sister owns the house in question. They refuse to negotiate the price of the house.

What does your contact state, normally you can walk away, you will lose everything you put up as down payment and all your payments,

Normally the contact states what happens if at the end you can not get financing.

READ THE CONTRACT! The contract should specify what happens if you default. Generally, the contract reverts to a rental lease and you forfeit evrything you have paid. Then see if yiut sister will negotate a new contract.

I know what the land contract states. My question is really concerning the purchase agreement that I signed. Am I bound by law to purchase the house no matter what? Isn't that what a purchase agreement is?

Are you saying there is a purchase agreement SEPARATE from the land sales contract? That certainly doesn't make sense.

But whether you call it a purchase agreement or a land sales contract or whatever, it still boils down to being a contract. And you are bound to fulfill the terms of a contract that you agreed to as long as the other party fulfills their end. What happens if you default on the contract should be spelled out in the contract.

Isn't that what a purchase agreement is?Hello p:

YES! But, every agreement in the world has clauses that say what happens IF the agreement ISN'T fulfilled. If YOURS doesn't say anything like that, it's an ILLEGAL contract, and you can get out of it that way.

READ your contracts.

But, beyond that, no matter WHAT the contract says, you're not going to be able to fulfill it, because the market has changed. Therefore, you're going to have to unwind your relationship no matter HOW you do it. So, I suggest that you hire a real estate attorney.

excon