Can A Seller Bow Out From A Sale?

So you've found your dream home, your offer was accepted, and your agent is working towards a closing day. Everything is going according to plan and you'll be moving in just a matter of weeks, right? Not so fast...

While it's usually rare for a seller to bow out of a sale, it can and does happen from time to time. Whether it's due to cold feet or an inability to find a new home, there are many reasons why a seller might want to back out of a deal. Therefore, it's wise for buyers to keep expectations and emotions in check until after the closing.

Below are 4 common ways a seller can back out of a home sale without any financial or legal consequences:

1. The Purchase Agreement Hasn't Been Finalized
   The seller has the right to back out of the home sale all the way up to the signing of the purchase agreement and potentially even five days after. Verbal agreements do not count, and a contract isn't enforceable until it's actually signed, so keep that in mind.
   
   Some real estate contracts also contain an attorney review period, which grants both parties the right to back out within a defined timeframe (usually 3 to 5 days). Bottom line — until both sides put pen to paper, the deal isn't done.
   
   
2. Contract Contingencies
   Sellers may decide to make the home sale contingent on certain circumstances, such as finding a new home. If the seller or their agent adds an escape clause to the contract, it's important to be aware of it. Your real estate agent can help try to negotiate these terms, or at the very least, minimize the timeframe. If the seller is attempting to draw up a complicated contract, you may also want to consult a real estate attorney.
   
   
3. The Buyer Breaches The Contract
   Purchase agreements usually contain requirements for buyers, such as securing financing or closing within a set period of time. If a buyer does not hold up their end of the bargain or adhere to the terms of the contract, the seller has the right to back out of the deal.
   
   
4. If The Buyer Agrees To The Cancellation
   Following the home inspection, a seller may refuse to make or pay for certain home repairs, which will essentially leave it up to the buyer to decide on the next steps (if there is a home contingency clause in the contract). In this instance, the seller's unwillingness to cooperate may force the buyer to walk away.
   
   If a seller has unique circumstances that are causing them to rethink the deal, they may also try to talk through the situation with the buyer in an attempt to get the buyer to agree to drop the deal.

If a seller decides to back out of the sale after the deal is already under contract, a buyer can pursue legal recourse. A real estate transaction is a lot of work and very expensive for both sides, so a buyer is well within their right to seek damages. There are also real estate laws that may force the seller to honor the terms of the purchase agreement; however, laws do vary by state.

Luckily, sellers don't back out of deals very often; however, if you find yourself in this unfortunate situation, it's important to know when a seller is able to walk away without repercussion. Your real estate agent should be able to advise you on the best course of action.

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