seller won't pay

What is the name of your state? CA
We are in the middle of escrow on a house we are buying. The seller supposedly just discovered that he has prepayment penalties on his home loan. This will put him upside down on the deal. He says he doesn't have the money to pay these fees and wants out. However, when he countered our original offer he stated in the counter that "seller agreed and acknowledges the loan payoff may vary from seller stated amount." My question is can he legally back out of the deal? What are the sellers rights in this situation? We are going to mediation on Monday at our request. Would like some info. before we go.
Thanks!

[HomeGuru]

Originally posted by Perkrus
What is the name of your state? CA
We are in the middle of escrow on a house we are buying. The seller supposedly just discovered that he has prepayment penalties on his home loan. This will put him upside down on the deal. He says he doesn't have the money to pay these fees and wants out. However, when he countered our original offer he stated in the counter that "seller agreed and acknowledges the loan payoff may vary from seller stated amount." My question is can he legally back out of the deal? What are the sellers rights in this situation? We are going to mediation on Monday at our request. Would like some info. before we go.
Thanks!

**A: my opinion is that you raise the specific performance issues as there is no contingency in the contract terminating the contract specifically due to Seller's mortgage loan prepay penalty.
The Seller should have found out about this penalty before accepting your offer.

Where can we find or reference in california real estate law regarding specific performance? Is there a book that we can purchase so that we may find out more information regarding this?
Thank you so much for your help regarding this matter. It is truly greatly appreciated.

[HomeGuru]

Originally posted by Perkrus
Where can we find or reference in california real estate law regarding specific performance? Is there a book that we can purchase so that we may find out more information regarding this?
Thank you so much for your help regarding this matter. It is truly greatly appreciated.

**A: read your contract.
Next, the issue is one of contract law. Hire an attorney to help you as I am not aware of any specific book specifically on specifc performance.