Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am posting this for a buddy that is in process of buying a home (or was in process).
He put an offer on a house, sellers accepted, went through inspection (paid for by buyer) and all was good, got financing ready, etc.. just waiting to close.
Buyer gets word that the sellers backed out of the contract and are not going to go through with the sale.
What rights does he have? I know he will get his earnest money back, but the inspection was ~$350 and supposively that just gets washed away.
Can sellers just back out for no reason, is there any reimbursement?
The general legal principles that apply are an adherence to the terms of the contract. It is very rare that BUYERS write anything into their contract for the possibility of the SELLERS backing out as it is fairly rare.
{As an aside it is somewhat standard for the LISTING AGENT'S contract with the seller to have some sort of "sales cancellation clause" so the agent gets paid / compensated for the effort / lose of income from the seller "changing their mind".}
Of course if this is NOT simply a case of the seller changing their mind, but an attempt by the seller to void this contract for sale and enter into a new contract with some one else at a higher price your buddy WOULD be in a strong position to go to court and ask that either a) the seller not be allowed to sell to anyone else b) the "jilted buyer" would get the additional profit instead of the deceptive seller. Of course getting an attorney to take such a case is not as easy as it would seem, as pay off would have be a pretty large sum to cover the costs of the suit...
I am posting this for a buddy that is in process of buying a home (or was in process).
He put an offer on a house, sellers accepted, went through inspection (paid for by buyer) and all was good, got financing ready, etc.. just waiting to close.
Buyer gets word that the sellers backed out of the contract and are not going to go through with the sale.
What rights does he have? I know he will get his earnest money back, but the inspection was ~$350 and supposively that just gets washed away.
Can sellers just back out for no reason, is there any reimbursement?
Backed out why? If they just changed their mind, then yes, you could make a case for the inspection money. If they refused your repairs, then no, they do not have to do your repairs. If they just decided, nah, we want to stay here and not sell our home, I would ask for the inspection money, but you're not likely to get it.
Contracts are drawn up for a reason. All promises outside that contract do not matter. Read your contract, specifically the "seller's out clause." In most cases if the seller opts out on a whim, they would need to pay some of your expenses, and perhaps their agent's too. But the thing you have to keep in mind, is that nobody can force anyone to sign a document. If the seller takes the closing documents to their attorney and their attorney decides the closing documents does not "protect" their client (the seller) they will advise them not to sign it. In this case, it is unlikely the seller could be on the hook for your expenses. There are lots of ways for a seller to back out of a deal and still be within the confines of being legal and within their right. Their attorney can "find" things wrong with the contract, or make unusual requests all day long and there is little you can do. It's a tactic often used for a seller to avoid selling their home and its perfectly legal.
Realtors tend to think people "have to do this, or that" when it comes to buying or selling a home. They loose sight that lots of legal documentation is involved and nobody has to agree to anything.
A buyer can refuse to buy a home cause there were too many repairs needed, even if the seller agrees to fix them all.
A seller can typically refuse to do any repairs.
The agents will scream kick and cry, and perhaps even scare their clients, but you cannot force the issue here.
Follow that contract, that is ALL that matters!
Last edited by WilliamHarman; 09-17-2009 at 08:59 AM..
Realtors tend to think people "have to do this, or that" when it comes to buying or selling a home. They loose sight that lots of legal documentation is involved and nobody has to agree to anything.
You need to hang out with some better real estate agents. While I have run into a few that have that mindset, most do not.
Thanks for the replies everyone, i will send him this link to read for himself. I thought he could at least get his inspection money back.
He does think that a higher offer came in on the house as well.
Thinking and knowing is not the same. Does the seller have an agent? Most agents would advise against this practice as they would surely have to be involved in it. If they truly backed out due to a higher offer and you can show this, then yes, you probably have a case. But it's going to cost your some $mulla to take action on it.
What the buyer does depends on how much they like the house. Sometimes just having an attorney draft a letter can help to remind the sellers of their contractual obligations.
I've never had a seller back out of a contract, but once my sellers caused the buyer to lose their lock and so they paid the buyer's fee to relock. Hopefully your friend has a good buyer agent to advocate for them.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
