As a seller, you should be absolutely certain that you want to sell your home before you list it. Otherwise, you’ll run into some serious trouble if you change your mind at the last minute and decide to forfeit the contract.
Sellers sometimes change their minds because they’re unhappy about the sale price. If you don’t like the offer, don’t accept it. If you have a feeling that you’re going to regret accepting such a low offer later, then don’t accept it. You can always reject an offer. Just because you haven’t gotten any bites on your home before this one buyer (who isn’t offering you a lot), doesn’t mean you should sell. For more information: Read This if You’re Withdrawing a Real Estate Purchase Agreement – HomeFinder.com.
If you’re a seller, looking for an “out,” first look at the contingencies written in the contract. Look for the ones that include the inability to get a mortgage, or a bad appraisal. There are usually lots of contingencies in a contract, and if you’re lucky, they might have forgotten to do some of the things on the contract. In which case, you don’t have to sell to them.
If, however, the contingencies don’t offer an escape, the seller is stuck with breach of contract as the only way to not sell the home, and that’s a risky strategy. Breaching a contract is serious business, with serious ramifications.
What’s more, the buyer might bring a lawsuit for specific performance, in which a court would order the seller to complete the sale. The buyer can say that they met all of the conditions, and have the check ready, as well as the financing. They can say, “I am going to give you this check, and you are going to give me the house.”
Then again, a seller may have some psychological high-ground if they are currently living in the house. A buyer’s effort to force a seller out of his or her home might not succeed. See: Breaking a Real Estate Contract. The buyer also might sue to recover consequential damages, which are reasonably foreseeable costs the buyer has had to pay as a result of the seller’s breach of the contract. An example would be temporary housing costs if the buyer ended up without a place to live because of the seller’s actions.
If a lawsuit ensues, the seller could try to argue that the contract or portions of it were invalid or un-enforceable. A lawsuit could be quite costly, and some contracts award attorney’s fees to the winner. That means a seller who breaches a contract and loses in court might have to pay the buyer’s attorney’s fees as well.
Another risk is that the seller’s real estate broker might insist that the seller pay the sales commission, even if the home isn’t sold. That’s a reasonable claim if the broker found a ready, willing and able buyer, but the seller took the home off the market.
Most brokers or agents won’t let them off the hook on that. In fairness, they did all this work: They marketed the house. They got a value you could live with, and now you don’t want to pay them for it. Read: 3 Must-Knows Before Backing Out of a Purchase Contract.
Some buyers will accept a seller’s apology and move on to another house, but others won’t be so understanding, even if the seller’s excuse seems valid to the seller. All things considered, the best option for some sellers may be to try to compensate the buyers for their lost time, effort, expense and opportunity to purchase the home.