There are certain times when a home buyer is allowed to back out of a home sale without any consequences. These are usually laid out in contingencies within the offer to purchase a home, and they exist to protect the buyer if something doesn’t work out. Other than those specifically stated terms, a buyer always risks losing their earnest money deposit or being sued if they don’t follow through with the deal. But what about the seller? After all, the seller owns the house, so what’s keeping them from deciding at the last minute that they don’t want to sell after all? Let’s explore some of the circumstances in which a seller can back out of a deal without consequence.
The contract isn’t signed yet.
Either party may back out of a deal before the contract has been signed by both the buyer and the seller. Perhaps the seller got cold feet. Or maybe the job offer that was forcing them to move to another city fell through. There are lots of reasons a homeowner might decide not to sell, and they’re completely protected as long as they back out before the contract is ratified.
A contingency hasn’t been met.
The seller might have included a stipulation in the contract that hinges upon them being able to find another home within a certain period of time. If they are unable to find another home before that expiration date, they’re perfectly authorized to terminate the contract.
The buyer doesn’t perform.
There’s a lot of behind-the-scenes stuff buyers have to take care of before a home sale is official. If, for any reason, the buyer doesn’t perform one of these tasks by a specifically stated deadline, the seller is welcome to cancel the contract. For example, if the buyer fails to secure financing within the number of days laid out in their offer, the seller doesn’t have to wait around for them to secure a loan.
There’s a dispute over repairs.
Even though a contract is completely ratified and financing has been secured, the deal isn’t quite sealed yet. There’s still a home inspection to be taken care of. Once the home inspection has been performed, the buyer will typically present the seller with the report and ask for certain items to be repaired before closing, or they might ask for a credit to repair it themselves. If the seller feels that the buyer’s requests are unreasonable, or if they have someone else lined up to buy the home as-is, they can walk away from the deal without any ramifications.
Yes, sellers are protected under certain conditions that allow them to walk away from a home sale. If you’re the buyer, however, rest assured that your seller cannot pull out of the deal for any old arbitrary reason without consequence. Sellers who fail to perform without good reason could be sued for breach of contract or for specific performance. Rest assured knowing that there are plenty of protections in place for both the buyer and the seller in a real estate transaction.