Question on legal rights for backing out of home purchase

[sunnyday]

What is the name of your state (only U.S. law)? Indiana

We have been in the process of purchasing a new home for the last month. Closing was suppose to be yesterday. The sellers wanted a rent-back agreement, so they could still in the property after closing for about a month. We obliged and there was a short provision in the lease agreement stating they would pay us "rent" for that month. About 2 weeks into the contract our lender said we could not have this written in the purchase agreement. So, our realtor had both parties sign an addendum to the contract. We were then told we would need to complete a post-closing agreement. In this agreement, we asked for a damage deposit. They refused, changed the post-closing agreement with $0 in the damage deposit section, and signed it back to us. This was late last week and we never signed it back. Without the damage deposit, we were not willing to let them have the rent-back agreement. Our realtor emailed us and said they were offering to delay closing for a month so to not have the rent-back, but this would cost us over $700 for our lock extension. So, last night we received an email from the buyers telling us they had borrowed the $1000 from a relative (apparently they didn't have it and that's why they weren't willing to give to us) and giving us until 5 today to decide what we wanted to do and to let them know how to proceed. The contract expired last night at midnight, correct? We have decided that we do not want to proceed with closing and write up a new contract. Our realtor informed us that we could be sued by the sellers. We are seeing a real estate attorney on Monday to discuss our legal rights.

I will tell you one thing that I think could be used as a contract breaker. One is that we wrote in the contract that "Completion of this contract shall be contigent upon the buyer's ability to obtain a mortgage loan for 80% of the purchase price and an interest rate not to exceed 5%. We were only able to obtain an interest rate of 5.25%. Is that enough to clear us from possibly being sued by this seller if they choose to do so? Also, would be able to get our earnest money back? We shopped around for rates to get the best one possible and actually had a float down and that was still the lowest we were able to obtain as of 2 days before closing. Since the contract expired and we had this in the contract are we legally bound to the purchase of the home?

[HomeGuru]

What is the name of your state (only U.S. law)? Indiana

We have been in the process of purchasing a new home for the last month. Closing was suppose to be yesterday. The sellers wanted a rent-back agreement, so they could still in the property after closing for about a month. We obliged and there was a short provision in the lease agreement stating they would pay us "rent" for that month. About 2 weeks into the contract our lender said we could not have this written in the purchase agreement. So, our realtor had both parties sign an addendum to the contract. We were then told we would need to complete a post-closing agreement. In this agreement, we asked for a damage deposit. They refused, changed the post-closing agreement with $0 in the damage deposit section, and signed it back to us. This was late last week and we never signed it back. Without the damage deposit, we were not willing to let them have the rent-back agreement. Our realtor emailed us and said they were offering to delay closing for a month so to not have the rent-back, but this would cost us over $700 for our lock extension. So, last night we received an email from the buyers telling us they had borrowed the $1000 from a relative (apparently they didn't have it and that's why they weren't willing to give to us) and giving us until 5 today to decide what we wanted to do and to let them know how to proceed. The contract expired last night at midnight, correct? We have decided that we do not want to proceed with closing and write up a new contract. Our realtor informed us that we could be sued by the sellers. We are seeing a real estate attorney on Monday to discuss our legal rights.

I will tell you one thing that I think could be used as a contract breaker. One is that we wrote in the contract that "Completion of this contract shall be contigent upon the buyer's ability to obtain a mortgage loan for 80% of the purchase price and an interest rate not to exceed 5%. We were only able to obtain an interest rate of 5.25%. Is that enough to clear us from possibly being sued by this seller if they choose to do so? Also, would be able to get our earnest money back? We shopped around for rates to get the best one possible and actually had a float down and that was still the lowest we were able to obtain as of 2 days before closing. Since the contract expired and we had this in the contract are we legally bound to the purchase of the home?

**A: you have an out and that being the financing contingency.