The typical buyer’s home purchase contract heavily favors them. Although, there are some protections for sellers, as well. It’s really more about the buyer, due to the financials. If you’re selling your home, you obviously want to get the biggest ROI possible. And, sell to a buyer who actually qualifies for the purchase. Not to mention, someone that is sincere and eager to go through with the deal. So, what happens if something goes awry and you as the seller can’t go through with the transaction? How does a seller back out of a buyer’s home purchase contract?
Sizing-Up Your Situation and Options
The reality of home selling is the fact these transactions give buyers more options. It’s simple to understand from a consumer advocate standpoint, since it involves such a large amount of money. This, in addition to a whole lot of time and effort. Now, this doesn’t mean sellers do not have any responsibilities — they do.
“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
Although, it’s important to understand how many escape avenues buyers have throughout the process. For example, a job loss means losing financing. Or, material defects found in a home inspection give buyers outs. And, there are more examples. Conversely, sellers have fewer options. For instance, even though your personal circumstances might change, this doesn’t mean you can simply walk away scot-free.
How Sellers can Get Out of a Buyer’s Home Purchase Contract
So, as a seller, you have your reasons for wanting to cancel the purchase contract. But, you’re struggling to find a legal way out and one that comes with the least amount of pain. Here are a few suggestions for how sellers can get out of a buyer’s home purchase contract:
- Buy yourself out of the contract. Okay, this isn’t exactly a free or even an inexpensive way out of the agreement. You can pay your way out by refunding the earnest money deposit. Plus, reimburse the buyer for various expenses, like the home inspection. Furthermore, you’ll probably owe your selling agent money. Basically, you’ll pay quite a bit but will ultimately be freed from the deal. While it’s not the best solution, it’s a viable one, generally speaking.
- Use the estate sale language. If you are an heir, then you have a bit more flexibility. (Especially if there are other heirs.) What this means is the fact that if there is more than one heir, all beneficiaries must agree on virtually every aspect of the deal. Should one or more object, it’s your free ticket to walk away.
- Refuse to pay for repairs. A shrewd but sometimes effective method is to refuse to pay for any or some agreed repairs. You’ll have to be a bit creative. But, if you can find a reasonable objection, such as disparities in estimates, you might just have your way out.
- Try to appeal to the buyer. There’s also the possibility of appealing to the buyer’s good nature. Approach the buyer personally and explain your situation. It’s possible you might strike a chord and appeal to their empathy. Of course, you may have to pay a little but it’s definitely worth a try.
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.