Why would a seller back out?
A Lack of a suitable home to move into.
This arises when the sale is contingent upon the seller finding a suitable alternative property to upsize or downsize.
B A higher bid may come in at the last minute.
This can happen and can be costly to the seller if he /she is willing to pursue further.
C The seller does not want to make repairs.
Most homebuyers get a home inspection done before they sign on the dotted line. The report may contain flaws that the seller is unwilling to repair.
D An unexpected life event.
There could be a sudden death in the family or the sudden loss of employment that could make it hard for the seller to move.
E The buyer does not adhere to terms of the contract.
If the buyer fails to live up to his/her part of the deal, for instance secure financing within a certain time frame, the seller does not have to wait.
Consequences to the seller.
When a seller backs out of a contract, which is a legally binding contract, he or she is exposed to certain legal ramifications as the jilted buyer can sue for damages and breach of contract.
The major risks facing a seller backing out of a deal are financial risks, which may include:
- Any fees incurred by the buyer such as inspection costs, survey fees etc.
- Temporary housing costs
- Storage costs
- Legal costs
When a seller decides to sell the home, it is important to ensure that the sale contract contains stipulations that provide a contractual out for the seller, if for some reason the decision to sell has been rescinded.
It may seem a little unfair when the homeowner legally still owns the home but has to pay a fine in order not to sell it. It is always a good idea to consider these things before a contract is signed. Once a signature appears on the contract, the terms have been agreed upon, and there may be very little that can be done to get out of the deal.
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