I made an offer on a home in Northern illinois, and I want to back out. I simply found a far better home for about the same price, in a much better area. I agreed to give up the ernest money, but I was told that if I back out, they will sue for $10,000 to cover the non-refundable (they claim that its non-refundable) deposit on their home (new construction). I even offered an extra $2500 to kill the deal, and they said they would only take $10,000 plus attorneys fees. Can they do this?? I was under the impression that ernest money is just that. If you change your mind, you forfiet the ernest money and thats it. Is there any way I can get out of this?? I need to know quick.

The conditions under which you can break your contract are contained in that contract, so I would suggest that you have it reviewed by a local attorney ASAP. If you are in violation of a contract that you signed, yes, they can sue you. Anyone can sue anybody for anything in this country. How much they might be awarded is up to the courts. You really should be consulting with local counsel at this point.

I agree. This happened late Friday, and no counsel will be available till Monday. I was just hoping some opinions and/or experiences could be shared before then. Thanks.

It is not your fault they are selling new contstruction to you that they apparently never intended to buy and live in. Who knows what is really happening? From what you are saying, forefeiting the earnest money should be enough to walk away, but I suggest talking to your realtor, if one is involved, and also to attorneys. It could be that you will need an attorney to write a letter on your behalf saying that you agree to let them have the earnest money plus $2500, and that under the purchase agreement they have no other reason to seek to enforce you buying the home because their non-refundable deposit is their problem since it sounds like they may be in violation of their own construction agreement trying to sell the home before it is even built. It sounds like they were assigning the construction agreement, or else were flipping and that is in violation of many home builder agreements these days.