House Purchase
My wife and I recently put an offer in on our retirement house. Then the market collapsed and is still falling. We’re both 61 and had $1 mil equity in realestate and $1.5 mil in investments (70/30 401k/taxable). I don’t think we’ll sell our current house by closing. We need those funds for down payment. Now I’m not sure Is the best time to make a move. How can I get out of the deal w/o losing my $25k earnest money?
Terry Says
Ugh — that is a very tough situation. I’m sure you’ve lost that much or more in the markets, as well. For specifics, ask your realtor if there is an “out” in the contract — maybe a financing contingency? Also ask your real estate attorney to read the contract. Maybe the seller understands and is in a tough position too, so might be willing to extend it until the sale of your house. It’s worth asking.
The other side of this issue is whether this is your “first loss” which is always the “best loss.” Proceeding could really impact your entire financial lifestyle, especially if your current personal or business income is impacted. You really don’t want to be carrying both houses in the economy that is coming now.
