You really love your home but it’s come time to sell and you’ve made all the right moves. You got your property ready and had it staged by a professional. The listing agent was spectacular at getting people to see your property and before you knew it, you had a great offer. It came at the right time, and at a price that will more than satisfy your return on investment.
Then, out of the blue, everything changes. For one reason or another, you can’t go through with the sale. It might be that relocation for a promotion didn’t come through as promised, or that you’ve lost your job and can’t afford to move and buy another property. While those are certainly reasons to be upset, they are not valid reasons to back out of the buyer’s purchase contract. Unfortunately, you’re in a precarious place and though not impossible, it’s not going to be easy to get out of unphased.
Sizing-Up Your Situation and Options
The real crux of the matter comes down to the very real fact that residential real estate contracts favor the buyer. Under the law, consumer protection is very important and because there’s so much money involved, buyers have more options to walk away. For instance, they can exercise the rescind clause, usually having three days to change their minds.
“Sellers sometimes change their minds because they’re unhappy about the sale price or the cost of repairs, have lost a job, decided not to relocate to another state or are involved in a loan modification, short sale or foreclosure. None of those excuses makes canceling a deal easy, however. Sellers who need an out should look first to the contingencies, or conditions, that are part of the sales contract.” —HSH Associates, Financial Publishers
What’s more, buyers have outs through the home inspection, the appraisal and financing stipulations, as well as the contingencies placed on the seller. However, sellers don’t have this type of flexibility, but that isn’t to say there’s no hope in the matter. Even though your personal situation has changed, it isn’t just cause to cancel the contract.
How to Cancel a Buyer’s Home Purchase Contract
Aside from hoping against hope, there are some options you have as a seller to get out of a home purchase contract, but none of them are pain free. Here’s what you can do to back out of a real estate purchase agreement:
- Buy your way out of the contract. You can actually buy your way out of the agreement, but that won’t come at a cheap price. You’ll have to refund the earnest money deposit, and reimburse the buyer for a variety of expenses, such as the home inspection and other costs incurred to go through with buying the home. You’ll have to contact the buyer’s agent through your own broker and get the buyer to agree. What’s more, you’re likely to owe your listing agent money to cancel the deal.
- Use the estate sale language. If this property was left to you by a relative or another person and you’re one of the beneficiaries, it’s possible that the others aren’t totally on board with the selling price. Should that be the case, you might have an out because in these types of situations, all the beneficiaries have to be in complete agreement in order to facilitate the sale.
- Refuse to pay for repairs. If there are repairs to be made and you’re responsible for paying for said repairs, there is the possibility the estimates and the actual costs are at enough of a disparity to change the dynamics. Should the repairs be more costly than previously thought, this can be an escape hatch.
- Try to appeal to the buyer. Another option is to try and reach out to the buyer and explain how and why things have changed. Approach the buyer on a personal level, but be prepared to pay for their good nature.
Last but not least, speak with a real estate attorney to learn about your options and be advised on the best way to proceed. You might just have a way to back out that’s been eluding you. In the end, you may want to rethink your motives and accept the deal to keep your sanity and pocketbook safe.