What Should You do if a Seller Backs out of a Home Buying Contract? LendingTree.com Shares Advice
CHARLOTTE, N.C., May 1, 2007 –You’ve found your dream home but then it quickly turned into a nightmare. The seller tells you they’ve decided to back out of the contract. What are your options? LendingTree.com shares the following advice about real estate contract disputes.
What you need to know from the start is that in most real estate deals, once you and the seller have signed a contract, neither party can back out without consequences. That said, real estate contracts do have clauses that allow a seller or buyer to cancel if certain conditions are not met. Be sure your real estate agent and your attorney review the contract and walk you through each clause so you fully understand the specifics of your deal.
The good news is most conditions in a real estate contract are designed to protect the buyer. So let’s say you make an offer conditional upon being approved for a mortgage. If your financing falls through, you can likely get out of the deal without consequence.
Be aware, sellers may include similar “escape clauses” in the contract. If you accept any condition when you sign the contract, the seller is able to back out if the condition isn’t met. But if a seller attempts to back out of a contract without such conditions, a buyer may be able to sue for financial damages. (Please note: This would be a lawsuit for financial damages, not a suit designed to make the seller turn the house over to you as a buyer.)
Specific consequences of any real estate contract dispute will depend upon the terms of the contract and the state you live in, but, in general, a seller is not entitled to renege on a real estate deal because they simply had a change of heart.
Buying a home can be stressful enough let alone having to worrying about taking the seller to court. That’s why you should work with your agent and a real estate lawyer before you sign the contract. This will help ensure the contract does not allow the seller to back out for arbitrary reasons. If you do find yourself in this situation after the fact, work with a real estate lawyer immediately to determine your options.
About LendingTree, LLC
LendingTree, LLC is the nation’s number one online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 20 million loan requests and $152 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, credit cards and high-yield savings accounts via www.lendingtree.com and 800-555-TREE.
Launched in 1998 with headquarters in Charlotte, North Carolina, LendingTree, LLC also owns and operates LendingTree Loans sm, LendingTree Settlement Services, LLC, GetSmart®, and HomeLoanCenter.com. LendingTree, LLC is an operating company of IAC.