Lake Tahoe home-selling tips: Getting out of a transaction
Special to the Sun-Bonanza
When Buyers and Sellers agree to the terms of an agreement, they are usually committed to doing what they can to complete the transaction in accordance with the agreement.
Every so often, however, something happens that causes a change of heart. When that happens, the party with the changed agenda works to get out of the deal instead of finishing it.
Most transactions have “weasel” clauses. Whether purposefully inserted or not, those vague clauses provide escape routes whereby a Buyer or Seller can quit the transaction without much consequence.
Sometimes the need to quit is circumstantial and understandable. Such a situation occurs when a physical inspection turns up something so severe that the Buyer won’t go forward, or the Seller wants to renegotiate the deal to offset unexpected high repair costs. Repair clauses are in most contracts and provide a safe exit when things go awry.
The problem transaction occurs when someone simply changes their mind, or something hiccups and they use the situation to implement a “gotcha” to the other side.
Depending on how the contract is written, there may be a way out, or a way to make the other party stay in the deal. Read your contract very carefully and ask a lot of “what if” questions.
Your Agent should be able to outline scenarios for you based on your theoretical questions that will give you an idea of what you are getting in to based on your feelings and commitment level. Know the personal variables that you might face and plan accordingly.
When people try to quit the transaction without the right to do so, it can cost them. Some contracts provide that the Earnest Money Deposit gets forfeited and there is no further obligation to the other party.
Other contracts will call for actual damages, how much harm the other party really suffered. If a Seller hires a moving company, moves out, rents a home thus having to pay the old house payment plus the rent of the new place there can be a substantial financial loss.
If you breached and are liable for that, you will be paying a lot more than your $1,000 to $5,000 EMD that you may have up.
There are many clauses in a contract that provide a way to exit a transaction or bind the other party to it. Most people don’t read the fine print. If you don’t read it make sure your Agent tells you about it. If you think it might affect you and your situation, ask for details.
There isn’t a one-size-fits-all contract. Contracts should be customized for you and your situation as well as tailored for the property and the seller’s situation.
With that approach every clause will be pertinent to the situation, not a hanger on that could be used to skew with deal without it having a practical application in the transaction.
Our Advice: Don’t go into a transaction looking for a way to get out of it, but be sure you have a back door in case you find that you aren’t getting what you bargained for.
Remember that every condition is a way out of the transaction if the condition isn’t satisfied. Most are legitimate, but once in awhile a party will lean on a weak condition to get out. Don’t agree to useless conditions, as there may be an ulterior motive for them being inserted.
The tightest contract won’t do much to keep a scoundrel in the deal if they are making a play to get out. Contracts are about integrity. A solid escrow has good integrity all around as all parties work towards the common goal, the close of escrow with everyone achieving their objectives.
If you find yourself needing out of a transaction, talk it over with your Agent. There is likely a way to get it done without hurting the other party.
The seasoned Agent understands that when one door closes another one opens. They will be able to work through the situation, as uncomfortable as it may be, for the best outcome for everyone.
Lisa Wetzel & Jim Valentine, CDPE, SFR, work for RE/MAX Realty Affiliates in the Carson Valley. Visit carsonvalleyland.com or call 775-781-5472 for information.