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What Should You Do if a Home Seller Backs Out of a Sale?

A man and woman sitting on a couch and talking with their realtor while holding paperwork.

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When you have an offer to buy a home accepted, you probably start envisioning yourself living in the property. You also generally begin to incur costs. For example, you might pay for an inspection of the home you’re buying, as well as for an appraisal. You’ll likely also move through the process of getting approved for a mortgage, which can take time. Plus, you may give notice to your landlord that you’re moving or begin the process to sell the property you were living in before.

In other words, a lot of stuff changes in your life because of your impending home purchase. But what happens if you hit a snag and the seller decides they don’t want to sell anymore? What are the options available to you in this tricky situation?

Here’s what you can do if a seller backs out of a sale

If a seller decides not to move forward with a home sale after accepting your offer, you have a few possible options.

You could sue for specific performance

Essentially, what you’d be doing is asking the court to make the seller go through with the sale. Specific performance is more common in real estate transactions than in other situations where people don’t follow through on contracts since monetary damages don’t always cut it. After all, one piece of property isn’t necessarily interchangeable with another.

You could sue for damages

Another option would be to sue the seller for money that you lost because they decided not to go through with the process. Depending on when they back out and how much you’ve spent, you may be able to get money back for appraisal or inspection costs you paid or any additional living expenses you had to incur because you couldn’t move as planned. You need to have specific evidence you lost money because of the sellers, though.

You could walk away

You always have the option of just walking away without a fight. Before you do this, though, you will want to see if perhaps the seller would voluntarily agree to compensate you for any costs you incurred. They may be happy to do that, rather than face a lawsuit. You’ll also want to get back any deposit you made on the property, which the title or escrow company holding the funds should arrange after they are notified the sellers backed out.

In order to pursue a remedy in court, you do typically need to be able to show that you were ready, willing, and able to follow through on buying the property had the seller not backed out. So make certain you can show that you would have had the funds and moved forward with buying if the seller didn’t change their mind.

Which option is right for you?

Now you know what you can do, but it’s harder to decide what you should do.

If it’s early in the process and you haven’t spent a ton or fallen totally in love with the house, walking away is the easiest option. But if you’re out money in a situation where the seller is clearly failing to live up to their obligation to sell, then getting a lawyer and suing could make sense. You don’t deserve to lose money because someone else changed their mind after signing a binding contract.

If you’re truly in love with the house, though, and absolutely want to buy it, suing for specific performance could be the way to go — as long as your contract is detailed enough for the court to decide to move forward with ordering the sale.

Since this is a complicated decision, talking to a lawyer is usually advisable in this circumstance. The good news is, you should be able to get legal fees paid by the seller if you win your case. Just remember, if you were ready to finalize your application to a mortgage lender and buy a house, and the sellers backed out, they violated contract law and should face the consequences.

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