Buying a home is one of the most significant investments that people can make. With so much money on the line and the major commitment involved, it’s probably only natural for buyers to occasionally get “cold feet” about a deal.
But what about sellers? Selling a home can feel equally momentous, and sellers aren’t immune from doubts.
Why do sellers try to back out of a real estate contract?
Sellers may want to rescind an agreement for all kinds of reasons. Some of the most common include:
- It’s a hot market, and they got a better offer on their home from someone else.
- They’ve had a sudden change in their situation, making it less convenient to move.
- They haven’t been able to find a replacement home that they find suitable.
- They’ve simply gotten emotional about the move and no longer want to leave the home.
All of these reasons and more are perfectly understandable – but that doesn’t mean the seller has a legally legitimate reason to back out of the deal.
When can a seller legally back out of a real estate deal?
By the time a seller has a change of heart, the buyer may have invested significant time, energy and resources into the deal. They may have had their credit pulled and reviewed, applied for a mortgage loan, had the home appraised and paid for an inspection. A seller backing out of the deal is much more than an inconvenience; it can be a financial disaster.
Whether or not the seller can legally break the contract, however, depends on a lot of different variables. Typically, however, they can only legally rescind their agreement when either certain contingencies written into the contract are unfulfilled or the buyer fails to live up to their obligation, first.
For example, the seller may have written a contingency into the contract that says the house deal won’t go through unless the seller can buy a new home, or the buyer may fail to get their mortgage approved so that they can close the deal by a critical date. Either could give the seller a legitimate reason to walk away from the deal.
Whether you’re a buyer or a seller, real estate conflicts have the potential to escalate very quickly. When you’re headed for a dispute, it’s wise to seek legal guidance.