Can a seller cancel their real estate agreement?
As a result of the rising real estate market, sellers who signed agreements four months ago saw similar homes sell for more money. They then try to cancel their agreement and sell to someone else for more money. Can a seller do that? Here are the answers to the 5 most common questions pertaining to this situation:
Can a seller cancel their agreement by refusing to close?
The answer is no. The buyer can sue the seller if this happens.
What options are available to a buyer if a seller cancels?
In the event of an attempt to cancel a sale, the buyer has two options. They can sue the seller to force them to sell the property at the price offered, or the buyer can try and purchase a similar property, and if they end up paying more for the comparable property, they can sue the original seller for the damages incurred.
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What should guide the buyer's decision?
This is not easy because to sue the seller to force them to sell, a buyer has to prove the home was unique and would not be able to obtain a similar home. This is not always easy to prove. In addition, a lawsuit could take years and the issue of where the buyer will live in the meantime arises. It may make more sense just to purchase a similar property and negotiate a settlement from the original seller for any losses incurred.
Is there a risk to the seller by cancelling?
There is also a substantial risk to the seller. Besides facing a lawsuit from the buyer, the buyer’s lawyer will likely register a caution on the title right away, preventing the seller from selling the property to anyone else if that was their rationale for cancelling in the first place.
Is it better to settle than sue?
It is always better to settle than to sue. Lawsuits are not only expensive, but they take an emotional toll on you as well. Think of how upset you get when you are given a traffic ticket and have to fight it in court. Now multiply the stress by one hundred, and you begin to understand what is involved in the process of a lawsuit. It is also possible a court decision could be made public, bringing you the publicity you do not necessarily want. Figure out a fair settlement, if at all possible.
At our law firm, we do every part of a transaction safely, whether it is signing documents through a video conference, transferring funds to our trust account and arranging lockboxes on closing for the keys. If you have any questions about how to set up your closing day, please contact me at firstname.lastname@example.org.
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