Can Sellers Back Out of a Real Estate Transaction?
You might be surprised to learn that sometimes, sellers can back out of a real estate transaction. No, they can't just walk away because they feel like it - but here are five instances in which it's okay for a seller to make a fast exit out of your deal.
Can Sellers Back Out of a Real Estate Transaction?
Sellers can back out of a real estate transaction for any of these five common reasons:
- The contract isn't signed
- The contract is under an attorney review period
- The buyer doesn't hold up his or her end of the contract
- The buyer wants repairs the seller doesn't agree with
- The seller has a contingency in the contract
Here's a closer look at each.
Seller Escape Hatch #1: The contract isn't signed
If the seller hasn't signed the contract, there's nothing legally holding him or her to it - and it's okay to nix the deal at any time. The contract isn't valid until it has all the necessary signatures.
Seller Escape Hatch #2: The contract is under an attorney review period
If the contract is under a legal attorney review period, the seller can walk away from the deal unscathed. The attorney can cancel the deal for any reason.
Seller Escape Hatch #3: The buyer doesn't hold up his or her end of the contract
If the buyer fails to hold up his or her end of the deal, the seller can walk away. A good example of this is when the buyer is supposed to secure a mortgage by a certain date. If the buyer fails to do so, the seller can say goodbye to the deal.
Seller Escape Hatch #4: The buyer wants repairs the seller doesn't agree with
After a home inspection, buyers often ask for repairs or concessions (like repair credits). If the seller doesn't want to make these repairs or give the buyer money to make them, he or she can refuse - and that could cancel the whole deal.
Seller Escape Hatch #5: The seller has a contingency in the contract
Sellers, like buyers, can add contingencies to real estate contracts. For example, a seller can say that he or she must find a new place to live before being required to sell the home. If the seller can't meet the requirements of the contingency, the deal is off.
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