So, you’ve got a good solid contract on the home you have for sale, and you’re ready to move on…or at least you thought you were. But you’ve now received a call from your agent who said that your 
buyer backed out.
Now what can you do?
Unfortunately, even though you had a written contract, there are times when the purchaser of a property will back out of the contract. Sometimes it is for personal reasons, other times financial, and still others the buyer gets such cold feet that they are willing to take whatever the consequences may be – other than going through with the actual purchase.
Regardless of what’s going on in the buyer’s mind, though, you need to protect yourself – and the good news is that there are some things you can do in that regard. The first order of business is to closely review the terms of your purchase agreement. That is because, in most cases, the purchaser is required to provide earnest money to the seller.
Should the sale go through, those funds would have gone towards the property’s purchase price. If, however, the buyer backs out of the deal, there are some real estate sales contracts that state that these funds constitute “liquidated damages,” and will therefore go to the seller.
If the contract does provide you with a remedy via the earnest money, there may be other avenues that you could check into, as well. These, however, will depend on how much financial damage the potential buyer has “cost” you. You may also want to factor in how long it may take to sell the property to another buyer.
For example, oftentimes, the primary form of recovery that a seller may recoup when a purchaser breaches their contract is the purchase price minus the fair market value of the property at the time of the breach.
In addition to that, it could even be possible to recover the cost of carrying the property – such as utilities and insurance – while you are waiting for a new buyer to come along. And, in some cases, these costs could even include advertising the property for sale again.
Ideally, you won’t ever have to worry about this situation. But, should the worst case occur, it’s good to know that there are options available. If you are considering the sale of your current home, and you would like to get an idea of its current value, Contact Us.
