You're Considering Backing Out of The Sale
The buyer offered everything you asked for. The wheels are in motion to
close the sale. But all at once a wave of "seller's remorse" flows over
you. You realize that you really don't want to sell the property.
What can you do? What are your options? And if you do back out of the
sale, what are the possible repercussions?
Contrary to popular belief, a seller never has to accept an offer
presented to him/her - even if it's for exactly what you told the agent
you wanted. However, the seller might be responsible for paying the
agent's commission, depending on how the listing was written. This is
because the agent has done what he set out to do - provide the seller with
a "ready, willing, and able buyer".
Secondly, while seller's remorse may not occur as often as buyer's
remorse, it does occur. It often happens when the seller realizes how
tedious it will be to find another home, move, and the costs involved in
doing so. Just as buyers need to re-hash why they wanted to purchase a
particular property, sellers need to remember their initial reasons for
selling (including the time, effort and money already expended in doing
so). And there's one more powerful seller motivator if you don't follow
through with the closing - potential legal recourse from the buyer.
What type of legal teeth would a buyer have against a seller who backed
out on selling his property? That answer would initially lie in how the
purchase and sales agreement was written. For example, the agreement might
state that upon any default, the defaulting party would forfeit the right
to any earnest money and/or down payment (paid or received), and that the
aggrieved party would also be open to seek legal remedies. Although not
too common, a buyer could petition the court to force the seller to sell
the property to him (called a suit for "specific performance") or seek
compensation for damages if they had expended money in anticipation of
closing on the property. A bottom-line worst-case scenario could include:
The buyer could sue the seller;
The seller would be required to mount legal costs to defend himself;
The seller could be required to pay the sales commission - all without the
benefit of proceeds from the sale.
If you're a seller who's considering bailing out, the first person to call
is the real estate agent involved in the sale. (No, it's not so the agent
can talk you out of it!) It's because the agent may have late-breaking
pertinent information that could impact your decision. This could include
that the buyer just found out that the financing he needs is much more
expensive than expected, his transfer has not yet been approved, and/or
the buyer is having a similar case of cold feet! Just as gathering
information was important before you accepted the buyer's offer, it's
equally important to check and re-check the facts before making a crucial
decision to call the sale quits.
Don't forget that if you do back out of the sale, it doesn't necessarily
mean that you can jump quickly back into the sales arena on your own
without consequence. The listing agreement you signed previously will
dictate the time period you'll be held to before you can sell the property
without owing the agent a commission. This is to deter sellers from
becoming for-sale-by-owners to sidestep the commission.
So should you feel that wave of "what have I done?" wash over you, take a
deep breath, weigh the pros and cons, and realize that what you're feeling
is a common emotion - and resume packing.