What happens if a seller backs out of contract?

I know if the buyers back out you lose the $$ you put down at contract....but what happens if the sellers back out?

Re: What happens if a seller backs out of contract?

It depends on what your contract says. As a buyer, you can try to put something in your contract about the seller paying any fees you incurr in connection to the sale (legal, inspections etc.) if the seller breaks the contract.

Re: What happens if a seller backs out of contract?

Once you have a signed contract I don't think you can just *back out*. They would be breaking the contract and there would likely be some financial and legal ramifications.

Our sellers never tried to get out of the contract, but she did stall about the closing date to the point that our lawyer threatened a lawsuit to force the closing, and she said that a judge would rule in our favor and force the seller to close.

Our seller agreed to late Feb. '02 in the contract, and dragged it to end of March at which point our lawyer forced the issue, but we weren't able to close until end of April. We later found out from the neighbors that the seller was upset that we were *forcing* her to move out so soon and that she thought she could stay until her son ended the school year in June

Re: What happens if a seller backs out of contract?

We almost lost our house during closing b/c the seller had a lean that he swore he paid years ago but had no receipt or proof of payment (yea, like you actually paid!). The title person wouldn't let us close unless he paid the $2000 lean and he refused (he was a cheapskate) and said that he didn't have to sell the damn house anyway....

I was very upset we were accepted and put a bid on the houe in Oct. and didn't close until July, so a lot of time lost...

Our lawyer said that if we didn't close that day, the seller would have to pay fines and we could sue since we met our end of the contract and he didn't. Luckily we didn't have to find out!

Check with your lawyer.

Re: What happens if a seller backs out of contract?

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Re: What happens if a seller backs out of contract?

You can sue them!! THey CANNOT back out that easily! Once they have signed, that's it!!! Our seller tried to back out but they couldn't!

Re: What happens if a seller backs out of contract?

Thanks for all the info. Our friends put a bid in for a house that was accepted but are afraid that they will try to back out since they don't have a house yet.

ETA: They are going in to contract any day now.

Re: What happens if a seller backs out of contract?

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Posted by februarybride

Thanks for all the info. Our friends put a bid in for a house that was accepted but are afraid that they will try to back out since they don't have a house yet.

ETA: They are going in to contract any day now.

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Wait! They are NOT in contract yet? well, then YES< they can pull out.. but they cannot pull out as easily if they are officially in contract.

Re: What happens if a seller backs out of contract?

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Posted by MarcellaBella

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Posted by februarybride

Thanks for all the info. Our friends put a bid in for a house that was accepted but are afraid that they will try to back out since they don't have a house yet.

ETA: They are going in to contract any day now.

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Wait! They are NOT in contract yet? well, then YES< they can pull out.. but they cannot pull out as easily if they are officially in contract.

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something similar happened to us...the seller backed out before we went to contract but after they accepted our bid (verbally). But once you go to contract that should be it....the contract is to buy the house so they have to be held liable.

Re: What happens if a seller backs out of contract?

I think they are more worried about them backing out after contract. I'm glad to hear for their sake it's not that easy.

Re: What happens if a seller backs out of contract?

Our BUYER broke his contract...in fact it was very easy..all he had to do is get denied for a Mortgage and that made the contract Null and Void and yes he got his full down payment back

There are always loopholes...

Re: What happens if a seller backs out of contract?

I do know someone that gut stuck by a seller. They backed out at the last minute leaving this family of 3 with a baby due any day literally out in the cold! They had sold already closed on the sale of thier house. I dont know if they sued them but they could not force them to move.

Luckily one of thier parents did the FL thing for the for the winter so they were able to move into their parents home until they found something. Be very carefuld about what your contract says.

Re: What happens if a seller backs out of contract?

Since every contract can be different based upon the negotiated terms, the following info is really based upon normal conditions...

I hope it is helpful.

Sale contracts often give the buyer the ability to cancel the contract within a certain period of time in order to secure a satisfactory termite inspection and that mortgage contingencies are met (usually to make sure that the buyer can get a loan at say 80% loan to value. in this market especially when so many homes are overpriced and the appraisal comes in low, this can be a valuable contingency).

However, there are timelimits usually listed to protect the seller so the buyer only has a certain window in which to research these areas (or do their due diligence)

It is a lot harder to back out if you are the seller...unless there are contingencies worked into the deal to provide them with these rights.

If the contract does not provide any 'outs' for the seller and they just refuse to sell, the buyer can sue for what is called 'specific performance' and make them honor the agreement.

Good luck!

Re: What happens if a seller backs out of contract?

I just picked up my contract today and it says they have to return my DP and all my expenses.