We found out I was pregnant in January with surprise baby number 3. Our house will not work for three kids. So we got to work right away to put it on the market. No easy task with two wee ones. My hubby mentioned that we wanted to sell our house to some neighbors who we knew were renting. They showed some interest and then some real interest. But they needed time to repair their credit. We agreed to wait. It seemed like a win win situation. No real estate agents, no putting it on the market. We were selling at appraised value. All we had to do was wait. Then at 13 weeks I miscarried. We decided we could still use the room and didn't change the deal. Now flash forward 3.5 months. We have changed our minds. A move was doable, but would have made finances really tight. We live quite comfortably in our smaller home. Our oldest starts kindergarten soon and will know quite a few people from t ball and the neighborhood, we like the idea of that. We could use more room, but really, who couldn't? We can make due with what we have. How do we break this news to the neighbors. We really like them and we don't want things to be strange. Plus I looked at the credit repair company they are using and it's costing them in the neighborhood of $800 to repair their credit. An investment they wouldn't have even considered without our input. Do we owe them anything financially? We are stressed about this decision, but we know it's best for our family, Advice? Thoughts? Input.
***We realize that realistically this will strain the relationship. At least for a little while. We NEVER talk about it (except checking in on the deal a few weeks ago), but we have overheard some excitement about our house.
***And I don't think they "didn't care" about their credit. I think they were working on repairing their credit and this deal encouraged them to speed things along and hire the company.
***We did NOT suggest credit repair in any way shape, manner or form. Originally we looked into a rent to own situation, but realized we couldn't finance it. When we told them that, they made the initiative for credit repair. They were told it would take 4-6 months, the website from the company says 6-8 months.
Did they sign a contract? Was there any written agreement about how long they had to "repair their credit" (I have never heard of this before). I would have thought this would be in everyone's best interest. I would be seriously upset if I were the neighbors and you backed out. I don't know what your/your neighbor's legal rights are, but I agree with Dawn, I would be asking an attorney.
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I certainly don't think you owe them anything financially.
But never give others financial advice, as the advice given to them by you was bad advice.
They decided to "repair" their credit at the tune of $800/mo when they could have done it on their own. That was a really bad decision on their part and unwise advice from you.
Really, this can be a win-win....you stay put and they "fix" their credit so they can go and buy ANY house sometime in the future. Hopefully.
Usually a good rule of thumb is NO business deals with friends or family.
If you really want to help out a couple that is struggling financially, buy them O. of Dave Ramsay's books as a gift. It will help them for the rest of their lives.
I DO think you owe it to them to have a sit down and tell them about your decision ASAP.
I'm so sorry about your miscarriage, I've had 3, so I know it's hard. Hugs.
Ugh, bad situation all around. Legally, you are probably in the right to keep the house. Morally, you are going against your word and you have to decide if you are comfortable with that. Go talk to them, tell them NOW they are not getting the house. Explain why, but be prepared for them to be MAD, rightfully so.
I'm so sorry for your loss. I'm sure this is a hard decision. Honesty is the best policy always, so go talk to your neighbors.
@Mamamay: Judgemental much? You don't know their situation.
You should tell them asap. I would be pretty mad if I were your neighbors, but since its just an oral agreement I doubt they could do much about it. If they were waiting to repair their credit before buying your house then I think it would have taken a lot longer than nine months to even do that! I think it takes at least a year for your credit to even be affected by anything good you are doing, so who knows what the timeframe would have even been.
Okay so your idiot neighbors fell prey to a company saying pay us this and we will repair your credit and you feel guilty? You didn't give birth to them so why would you feel guilty because they are stupid!
If they actually repair their credit, which is unlikely with these companies, there is nothing stopping them from buying a house, just not your house.
Okay, oral agreement post, there was no consideration so no contract oral or otherwise.
Okay so no one is listening. There are several transactions that are required by law to be a written agreement, off the top of my head, marriage and the buying and selling of real property. Just as a man who proposes is not legally bound to walk down the isle two neighbors talking about buying and selling a home are not legally bound to sell the home! In marriage it is the vows, which spell out the consideration, which seal the written contract, usually a marriage license and certificate. In a transaction to sell real property is is signing the contract to buy and the exchanging of the down payment or consideration. Only after this happens is there any concern for monetary damages.
I think if you are seriously not going to move you should be straightforward about it... maybe mention the miscarriage and that you decided not to add more stress on the family by moving. I think any way you tell it, there will be some strain on the neighbor-love unless they are pretty laid-back. I don't think you owe them anything financially just because credit repair means they could buy another house, car, etc. That will do nothing but help them even if they don't buy your house... that's how I would look at it if it happened to me. But I would be kinda mad if I adored your house or something.
You had an oral agreement to sell your home to them down the line when they repaired their credit, and, I assume, where able to get financing.
Check the legality of oral contracts in your state
But, your situation changed and you no longer need to sell the house
So, don't sell the house
Even in traditional real estate transactions sometimes the seller decides not to sell, even after the buyer has looked and offered. It happens.
Explain to your neighbors, that now, selling is not a good option for your family. Apologize, then move forward.
Worst case scenario - they have repaired their credit, and will be loan worthy for another home.
God Bless
You have to do what is best for your family, with lots of heartfelt apologies.
So they only reasons they care what their credit looks like is because they want to buy your home?
This is just what I would do, you have to do what you think is right. I would explain that the miscarriage changed everything, give sincere apologies for backing out of the deal, and give them $800 as an apologetic gesture. I wouldn't offer to give them the $800, I'd just hand them a check when I apologize.
First of all, I'm so sorry for your loss. I think you should tell your neighbors as soon as possible, letting them know the miscarriage changed everything and now, you are staying in your home. I absolutely don't think you owe your neighbors any money. There was nothing in writing and yes, while I realize there was a verbal agreement, if your neighbors have any kind of empathetic bone in their body, they will be understanding. I'm sure they will be very disappointed, but aren't you disappointed at this time also?
I wish you the very best of luck. I hope it works out where they understand and will stay friends. :)
