You have a signed contract to purchase a home. You've begun the tiresome process of obtaining a loan, hired professionals for inspections, and are continuing to fulfill your obligations written out in the contract...and then, you get a call. The seller is backing out of the sale.
It rarely happens, but occasionally, sellers will decide that they do not want to sell their homes--even after both the buyer and seller have signed a sales contract.
If this happens to you, what are your options as a buyer?
1. Read the sales contract very carefully.
Many sales contracts, and most state laws, provide buyers with a “right of rescission,” but very rarely do sellers have these same rights. If both parties (buyer and seller) have signed the contract, then the contract is probably enforceable and, the seller may be held liable for any damages incurred by the buyer.
Unless the sales contract provides the seller with a potential legal “out,” such as a clause allowing the seller to remain in the home until he or she “finds a suitable replacement home,” you may have a strong legal position as a buyer with a signed sales contract. After all, what is the point of a written and signed contract if not to protect you?
There are some exceptions where seller's may be able to legally back out of a contract. One exception is if the seller has passed away before closing and ownership of the property in question has been passed to children or other heirs. In this event, the contract may be null and void and a new contract would have to be signed.
2. Estimate your damages.
You have undoubtedly incurred expenses while attempting to purchase this home and you will most likely continue to incur additional expenses, especially if you have to start your home search again, have to find temporary housing, or pay for storage.
Your expenses could include these housing and storage costs, plus inspection and survey fees, deposits, travel costs associated with searching for and purchasing the home, and even travel costs to search for another home.
Be sure to keep all of your receipts and maintain accurate travel records. Maintaining complete and accurate records may provide you with a much better chance of recovering what you’ve lost.
Unless you want to file a lawsuit immediately, you may want to consider trying to negotiate with the seller to compensate you for your damages. Working through your REALTOR, you can let the sellers know the types and amount of expenses you have incurred or will incur. By negotiating, you can attempt to be compensated for some, most, or all of your expenses.
Always remember, though, that you may be negotiating from a legal position with a signed sales contract. Also realize that the seller may have significant legal exposure if he or she does not settle with you. Not only can the seller potentially be forced to pay your actual expenses, but he or she may also be required by a court to pay your legal fees, as well as, punitive damages.
As you negotiate, you should also consider the amount of time it may require for a lawsuit to move through the court system and the amount of aggravation (and time) you would need to commit in order to file (and win) a legal action against the seller. Take into consideration that even though you may have a strong legal position, there are no guarantees that you will win your case.
4. Hire an attorney/file a lawsuit
If negotiations fail to produce what you believe is a fair settlement, then you should consider hiring an attorney and filing a lawsuit to recover your damages.
Although your REALTOR has been very helpful up until now, once you have retained an attorney, all communication between you and the seller should be made through your attorney. Remember that if the sales contract has been signed by both parties, you may have a strong chance of prevailing in any legal action--so don’t be afraid to stand up for your legal rights!
No matter what your real estate issue or need may be, Landmark Realty Services has the proven experience to serve you. Call us today at 304-842-5298 to schedule an appointment with one of our wonderful real estate professionals and get all of your questions answered!