When can I put my house back on the market after a contract falls through?
04/19/2016 | Author: Legal Staff
A buyer and I used TREC’s One to Four Family Residential Contract (Resale) for the sale of my home, but the sale didn’t close by the date in the contract. While the buyer and I figure out how to terminate the contract—and who gets the earnest money—can I put the house back on the market? I want to sell it, not waste weeks while we consult our attorneys.
You should talk to an attorney first about the legal liabilities of proceeding with a sale without terminating the original contract.
In this situation, there are two ways to formally terminate the contract:
- The parties can agree to terminate and sign a document that releases both parties from further obligations under the contract. If you are working with a Texas REALTOR®, he or she can use TAR’s Release of Earnest Money form to accomplish this.
- A judge can order the contract terminated.
Your primary goal should be formal termination of the contract. This ensures you can sell the property to someone else without risking a lawsuit that could stop a subsequent sale of the property.
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Marti, I totally agree. I am constantly amazed that TAR has an online ‘dialogue with the public’ about these unlikely examples. Sometimes I wonder if TAR knows how a real-life transaction occurs. Why are realtors paying dues to an organization that seems more concerned with giving the public advice than to the licensed professionals financially supporting their existence. TREC’s job is to protect the public. In this bizarre Texas market, realtors and brokers need a professional association that provides education and support.
Okay guys - here is my question… Why is TAR giving any advice to a Seller other than to say “seek the advice of an attorney”. Now I know we have legal eagles at TAR but the Sellers got themselves in a mess by not using a REALTOR® in the first place.
Sure they obtained the TREC 1-4 off the TREC website - looks easy enough right? But as REALTORS® we know better.
Personally, I do not think TAR should be advising the seller: “In this situation, there are two ways to formally terminate the contract”. While it was a nice gesture on behalf of all REALTOR® - let those who don’t place their confidence in our professionalism learn from their own mistakes by referring them to an attorney instead of doing so and then turning around and give them the “How To’s”.
@ Candy. In a word. NO! The contract is not terminated! That is why both John & Sweet Susie Q both should hire Texas REALTORS® to at least explain that simply tearing up that document does not end the agreement created under that document. Especially if a copy already has been sent to escrow along with earnest money. Also the REALTORS® would advise their respective clients to seek the advice of an attorney in this matter if they cannot agree upon who gets to keep the earnest money. The contract typically spells out who gets to keep it, and what the steps are for getting it in a default, but it seems the post is going beyond that towards what will ultimately be decided in litigation or mediation. In either case. CYA!
I don’t know of a title company who will release earnest money without a Notice of Termination and Release of Earnest Money!
Let’s pretend that I’m Susie Q. Public and I was selling my house to John Smith…we got a copy of the 1 to 4 resale contract from the TREC website, filled it out to the best of our ability. Then John, decided he didn’t want it. While being heartbroken, Susie Q. is just the sweetest she can be and she and John sit at the kitchen table and tear up the only and only filled out version of the contract.
To John and sweet Susie Q. that is terminated…
it is not???
This is a very much CYA (Call Your Attorney) issue. Not at all for a REALTOR® to advise or decide!
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