Can a Seller Back Out of a Real Estate Contract Without Repercussions?
After accepting an offer, some owners have seller's remorse. It's not always easy or possible to back out, but there are times it can happen.
You’ve accepted an offer on your home, but instead of celebrating like most sellers, you start to experience serious pangs of regret. Despite your confidence in your decision to sell before, your deep love for this home — or perhaps a sudden change in circumstances — has made you second-guess everything. You need an out from what appears to be an ironclad contract with your buyer.
Unlike taking your house off the market, withdrawing from a purchase contract can cost you big time. But are you stuck? Not necessarily. In this article, we explain under what circumstances a seller may cancel a home purchase agreement.
Reneging on a contract to sell your property can be a risky and costly undertaking. To provide you with the most expert advice, we consulted with Los Angeles real estate attorney Zach Schorr, top real estate agent Basil Yaqub, and veteran agent Greg Garrett, who brings more than 45 years of experience in the real estate industry to the table.
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Are real estate contracts legally binding?
Real estate contracts are legally binding agreements, making it anything but easy for a seller to simply back out. While most contracts include contingencies that may allow an escape from the deal, those loopholes are generally built in to protect buyers, not sellers.
Yaqub witnessed this firsthand in a recent transaction where the seller changed their mind after the contract was signed. “The seller had to pay the buyer $20,000 just to get out of the contract,” explains Yaqub.
Considering the alternatives, which could include pricey legal fees, a lengthy court case, or removal from the home, this was an agreement Yaqub considered to be a good deal for the seller. Over his 19 years in real estate, he’s witnessed his fair share of sellers try to back out of a contract for a variety of reasons.
