QUOTE (TerryF @ Oct 25 2009, 08:34 AM) I was in the same boat but hired a lawyer to review the contract and see if there was a way out of the contract. They found the out I needed, contract was voided, and I got the deposit refunded. A friend also got out of their contract. Get a lawyer who specializes in contracts. My lawyer told me that most contracts have deficiencies of some kind or another. If your contract has a deficiency it may be enough to void your contract.
If you just walk away, you will lose your deposit and you could also be sued for the difference in $$ if they have to sell it to someone else at a lower price. So it your case, it could mean you owe the builder another 30k if they successfully sue you!
First of all, if you had attended REIN workshops and listened to Don Campbell you probably would not have bought such a condo. If you did hear Don and decided to buy anyway, then it was you who gambled on yet higher prices to come and it will be you who will have to pay the price.
I can understand that you may wish to find loopholes in the purchase contract, because that is what you have signed (a contract). I would too. But in the end, you just try too shove your losses onto someone else, i.e. the builder. It is not the builder`s fault that you bought and he would not have profited from any further price increases. So why do you expect him/her to carry your losses?
I don`t like builders, but neither do I think it is right to walk away from contracts that you bought on speculation and now that you are presented the downside, you won`t accept the consequences.
Sounds harsh. But it is reality. All investors with leverage (and you used extreme leverage), lost net worth in this downturn. It only becomes a real loss when they/you sell. Since most REIN investors do invest based on positive cashflow, they can hold on to their purchases, some of which may not look brilliant right now, and wait for better times.
I suggest that even if you cannot get out of your contract, you try to hold on and over time you will likely grow out of your not enviable position.
Once, I bought in real estate that a year later had fallen by 50% and I was severely underwater (every investor takes his/her lumps). I ensured I had the best financing possible and started working on reducing my debt to manageable levels. Unfortunately, their was no REIN forum that provides advise how to optimize your position. As long as you keep up with your mortgage and loan payments, chances are that the banks won`t bother you and once the real estate market recovers your current problems will be of the past plus you have a valuable education from `hard knox`.
There is alway`s something good that comes from bad situations. Did you know that I met my wife through my troubles? She was a prospective renter and although she did not want to rent, she wanted to go hiking. Amazing thing was, after she found out that I was in deep financial sh.... she still went out with me. That is something you can build on! And now we`re still together after nearly 25 years. Not that marriage is eternal bliss or unending happyness. But, we`re still together on our way to a beautiful sunset [in Belize].
Hope this helps
