Can A Seller Back Out Of An Accepted Offer On A House?
Go Back To Previous PageYou searched long and hard for the perfect home. It is your white picket fence. It was perfect when you found it. You decided to get the house and put together an offer. The seller accepted, but then you get some news from them directly. They suddenly don’t want to sell. Is this legal in the home-buying process? Backing out of an accepted house offer can be tricky. Is this even possible? Can a home seller Back Out Of An Accepted Offer On A House? Also, can a buyer back out of an accepted offer? What is happening about purchasing the property?
Concerns about having a seller back out of an accepted offer are reasonable. After all, you expect it to be an (almost) done deal. Well, it should be. But, like any other major global issue, it doesn’t always play out that way.
It’s time to discuss what every buyer
should know about the housing market.
Is It Possible For A Seller To Back Out Of An Accepted Offer?
Buying a home gets stressful, and there are plenty of moments during the sale of a house where something can go awry. We all dread accepting an offer on our dream home, only for the seller to change their mind and leave us in the dust.
Unfortunately, these scenarios are not uncommon. But more often than not, there’s a contractual clause intended to protect buyers and sellers from situations where one party backs out of a sale.
It’s sometimes easy to understand why a buyer may decide to back out of a deal. And that’s more commonly what happens. Maybe a home inspection comes back with unfavorable results, or there’s a contingency in the contract that the seller can’t fulfill.
Can a buyer back out of an accepted offer?
However, buyers often have more to lose. And more chance of enormous disappointment when a sale falls through unexpectedly on the seller’s end. It is devastating to put in an offer and think you’ve landed the deal, only for the seller to dash all your hopes and back out of the home purchase agreement.
So, often buyers wonder, can a home seller back out of an accepted home offer? And if so, why might this happen?
Scary as it is to us all, yes, it is possible. However, that does not mean that it’s always possible. Legally, a seller can’t just decide they don’t want to sell a home to you and walk away from a deal, and there are rules about when they can and cannot renege on an accepted offer.
When the seller signs that contract, they are legally obligated to sell that house to you, even if a more prominent offer is around the corner.
Reasons a seller might walk away from a real estate contract before closing.
Simply put, a seller can back out at any point if contingencies outlined in the home purchase agreement are unmet. These agreements are legally binding, so backing out of them complicates a deal that most people want to avoid.
There are, however, several common reasons why a seller might get cold feet and walk away from a deal. Here are some reasons why they might decide they no longer want to sell:
- They get cold feet, usually because of emotional attachment to a house or concern about the new owners, and decide to take place off the market.
- They can’t find another home to move into. This is common when their purchase falls through on a new home they were looking to purchase. A
lack of replacement housing may mean a seller can no longer part ways with their current home without anywhere to go. - A life event, such as a pregnancy or death in the family, may also prevent them from following through with the sale.
- Even if the buyer was pre-approved, a low appraisal vs. the purchase price gets detrimental to a sale on the seller’s end, and if they’re unwilling to lower the sale price to match the appraisal value, this can cause the seller to cancel the deal. In this case, the buyer gets his earnest money returned (usually 10% of the offer price).
When Can A Home Seller Back Out Of An Accepted Offer?
There are only three times that a seller can legally back out of an accepted offer:
- If the buyer or seller does not meet all the stipulations in the offer, they can back out. Every offer will have contingencies that buyers and sellers must complete. If a buyer fails to meet all the expected contingencies, the seller has the legal right to withdraw from the offer.
- If a contingency out of either person’s control falls through, they can back out. For example, if the seller dies, they probably can’t sign off on the home sale.
- If you ask a seller to back out of the offer and agree. While this is highly unusual, it still happens on occasion,
When Can You Back Out Of An Accepted Offer?
Generally speaking, the same rules apply to sellers as to buyers. If you want to back out of an agreement to buy, you typically have to have a reason stated in the contingencies, and you cannot get out of the contract if contingencies don’t afford you an exit.
What Happens If They Refuse To Sell You The Home After Accepting An Offer?
This all depends on what the reason is and what the entire situation is.
If A Contingency Wasn’t Met.
If a contingency wasn’t met, they reserve the right to end the deal and refuse to accept any other offers you make. While you can correct the
issue, this doesn’t mean you’ll get a second chance. The house will either stop on the market or go to another buyer.
If You Both Agree To Quit: Back Out Of An Accepted Offer
This is ideal for all parties involved in real estate transactions. Most people in this situation don’t want this deal to go through. This is a happy ending, especially for the buyer.
If The Seller Randomly Reneges On The Deal
This is not good at all, nor is it legal. If a seller refuses to sell the house after accepting an offer, the buyer can take them to court. You can ask your real estate attorney and agent for advice on pursuing this.
Can a seller accept another offer while under contract?
Often, people wonder if a seller can back out should they receive a better offer from another potential buyer. This is an understandably worrisome scenario, particularly if you enter a contract on a highly desirable home.
You don’t want someone else swooping in and snatching it right out from under your nose! But not to worry, sellers can no longer accept another offer from a different party once they have received an offer and a contract signed.
Should You Sue If Your Seller Reneged On Your Deal?
Honestly, this is up to you at the end of the day. What we can say, though, is that discussing your next course of action with a talented and qualified real estate agent is a good move. They can help you determine if it’s the right move for you and hopefully help you find a home that’s even better than the one you didn’t get.
It is heartbreaking to lose out on a home that you desperately wanted. However, it happens in any local market. When it does, it’s important to remember that other homes are waiting for you to move into.
