After all the trouble homebuyers and sellers go through to make a deal, it can be emotionally devastating to have the whole thing suddenly fall through.
It does happen, however. Buyers may end up bowing out of the deal for any number of reasons, including marital problems, job losses, financing issues and just plain inability to commit to the purchase. Sellers sometimes get “cold feet” about a sale and decide they don’t want to move after all — or they think they may get more money from another buyer.
What’s the remedy when a buyer or seller wants out?
Once a deal is made on a home, it automatically puts everybody in a holding pattern for several weeks while closing approaches. If a buyer wants out of the deal, the consequences for the seller may be that their house starts to “age out” on the real estate listings. Subsequent would-be buyers may wonder what is wrong with the property. Time has already been lost, and possibly money.
If the seller decides to back out of the deal, the buyer has also lost opportunities. They may have also wasted money on a home inspection, mortgage applications and more.
Both buyers and sellers alike usually mistakenly believe that the only thing that will happen is that a buyer who backs out of a real estate deal will lose their earnest money and a seller who backs out will have to return the buyer’s earnest money.
Contracts have consequences, however. Both buyers and sellers can sue for specific performance and force a deal to go through — but that’s not necessarily practical. Litigation is time-consuming, at best, and nobody will be moving while the home is stuck in the middle of a civil suit.
What are your options to protect yourself?
Home sellers need to be proactive about their real estate contracts. For example, asking for a significant amount of earnest money can make a buyer think twice about skipping out on the deal.
Buyers are in a more limited position, but they may be able to use the threat of a lawsuit to get back not only their earnest money but also an equal amount to that money as compensation for their lost time and effort.
Ultimately, the wisest move you can make is to involve an experienced Ohio real estate attorney at every step of the process.