Were you harmed by it?
Can you collect?
Were they within their rights to back out?
So many people do not understand that when they back out like this that they may have actually harmed the seller financially, but the law recognizes that and makes allowance for you to be compensated. On the other hand the law allows protection for the buyers as well.
If you look at your purchase agreement you will see that there are several "contingencies." In other words, the contract allows the buyer to back out for certain reasons, if done in certain time periods. If the buyer is backing out based on a contingency and has met the time periods specified sign the release and move on they are entitled to their deposit back.
On the other hand if the buyer took too long to decide to back out, or if they are claiming a reason for doing so, is not specified in the contract, you may have cause to keep their deposit. On FHA and VA purchases I have been told you may not keep the deposit , but they may not know that, so often people keep these deposits anyway. If they contact FHA or VA they will step in and ask for the deposit to be returned.
So you may have cause to keep the deposit and maybe even collect for damages if they went over the contingency period or are backing out for a reason not specific in the contract. In most states buyers are also allowed to back out on any new information. So if there was a disclosure that the house was built on a toxic waste dump a day before closing, they buyer can back out and keep their deposit. That is why when I used to list homes, the buyers got all of the disclosures as soon as the ink was dry on the contract.
The problem is trying to collect may create a cloud on your title that could stop you from selling the house to someone else.
Also the buyer may not be at fault. I see most of the time this problem is caused by lenders who simply do not understand that they must have the appraisal done on time, they must have the loan approved, on time and must close on time. They do not seem to understand the extent of the problems that they cause by it.
So here is the advice, If they are within the contingency periods, let it go. Also you should be a bit more forgiving if the problem was the lender as most simply do not get it. On the other hand if they just drug their feet, they are way past their contingency period, you may want say that is the case and try to collect the deposit. More so if you were actually harmed; letâ€™s say you put down a deposit on another house that was non-refundable. But even taking your house off the market may have caused you harm.
If you were harmed maybe they should lose their deposit, on the other hand if you spend your time fighting these kind of battles you will not be moving on to the business of getting your house sold.
Demand is increasing, inventory is down. I am seeing many offers come and go, get cancelled as buyers are changing their minds.
Talk with your agent, best of luck.
Your agent should definitely explain to you why the buyer cancelled.
So this needs some clarification, although I think that you are definitely the home seller....
If a buyer cancels a sales contract, there has to be a good reason and the agent should know exactly what happened. Was it just an offer, or did both sides sign a fully executed legals sales contract, was it
then still within the inspection and attorney approval period, did something come up for the buyers during the inspection? or did the buyer not get their loan commitment.
As you can see from the above without exact details where in the process you were when the buyer pulled out, hard for us to tell what your standing is. But since you are obviously working with a Realtor,
and if this Realtor is your listing agent, he or she should know the reason and the legal standing at this
If you wonder and do not get good answers, next offer / sales contract work with a real estate attorney
Good Luck to you
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