Generally, both the seller and buyer have a certain timeframe to back out of a deal before it proceeds to the next step where they sign paperwork and the money progresses through escrow which can lock in the sale. However, there is a point of no return that can seriously cost the buyer if he or she cannot continue or chooses to refuse the deal.
When someone has a property for purchase, a buyer will usually appear inquiring about the real estate. In this process, the buyer may not get to the point of signing paperwork until weeks later. However, once the buyer gets through each smaller step in assessing the property, checking it with an inspector, analyzing the real estate with an appraiser and getting a loan to purchase the property, he or she will move to the stage where money will enter the picture finally. It is at this point that the deal starts the irrevocable process without consequences. The seller can often require a certain amount of money no matter if the buyer backs out.
Once an accepted real estate purchase process and agreement get to the point of signed documentation, it is usually binding by law. This legally obligates both buyer and seller into the deal to the conclusion. The only exceptions involve a complete destruction of the property, if one or both parties die and undisclosed defects. However, cancelling the deal could lead to a lawsuit from the seller to the buyer because of the breach of contract and legal violation. The seller can seek a legal remedy for the action and take the buyer to the state court. The seller can also often keep the deposit such as when earnest money is in the deal.
The seller may have the option to sue the buyer that breaks the deal, but he or she can also seek other options that can help salvage the loss of the initial sale. By taking the earnest money, this person can relist the property and seek a new buyer. The seller can also hire a lawyer and seek another legal remedy from the buyer such as compensation in addition to the earnest money or some other outcome he or she decides. The seller can also decide to leave the property as-is for a time without entering into a new deal with a potential buyer.
The seller can cease the initial sale once the deal falls through and take any earnest money already fronted. This is often the first action the seller will accomplish to recover all invested fees and money into the property for this broken sale. Then, the seller can place the real estate back on the market and look for a new buyer. The seller may feel a lawsuit is too lengthy or costly and seek to sell the property rather than take the previous buyer to court. However, this person may increase the price of the property or perform more services such as adding to the land or house.
The seller may need to consult with his or her real estate lawyer to decide if it is better to relist, only take the earnest money or to proceed through a lawsuit. The lawyer may explain the options available based on the circumstances. Even with a successful litigation trial, the buyer cannot pay monies he or she does not have. For the case to give the individual seller the best outcome, he or she will need to assess all factors involved in the case. The real estate lawyer can assist with these options.
Suing for specific damages and settling out of court through only partial payment is also possible. This is a limited settlement negotiation to cover the broker, real estate agent and escrow fees. The seller may decide to also relist or keep the property off the market for the time being. He or she will need to consider which opportunity is available at what time and how best to take advantage of it.
The real estate lawyer may become an important professional in the case when the buyer backs out of the deal. If he or she has the funds, the buyer may face a valid lawsuit for this action.
Provided by HG.org
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. To get a better understanding of your situation and discuss the details of your case, please call Tequisha at (561) 838-9595.