When you’re buying a home you put down earnest money that assures the seller that you will purchase their house. If you back out of the agreement after the contract has been signed for reasons other than those stated in the contract, you’ll lose your earnest money to the sellers who will collect it in full. But what happens if the seller backs out of the contract? With no money at stake, what’s keeping them from changing their minds at any step along the way? Here’s what you can do if the seller backs out of the contract:
– Have a heart-to-heart talk with the seller. The most important thing to do right away is to talk with the seller to find out why they no longer want to sell the house to you. There are a variety of reasons the seller may have changed his or her mind but some common ones are: a house they are buying falling through or unexpected hardships in the form of sickness, death or changes in their financial status. If the sellers are backing out for any of these reasons, you may be able to discuss delaying the sale of the their home or changing some of the contract stipulations to make both parties happy. Unfortunately, some sellers want to back out for a more malicious reason: they’ve gotten another offer on their home and they’ve realized they can make more money selling it to someone else. If the latter is their reason, there may be some courses of action that you can take in order to be reimbursed for any financial and emotional detriment you have incurred during the buying process.
– Get your earnest money back. Regardless of any future steps you may take, be sure to get your earnest money back from the seller. Since the money is typically held by a third party (because of situations like these where the money needs to be returned), the money can generally be returned quickly and with few problems.
– Decide if you want to or need to be reimbursed for other expenses. If you’ve paid for an inspection on the home already or have incurred other expenses because you anticipated buying the home, you may be able to recoup these costs from the seller. In some instances, sellers may be willing to reimburse you for these costs, especially if they are minimal. If the seller refuses to pay, you’ll be forced to make a decision on whether you want to sue the seller to recoup your lost money. In many cases, the cost to retain a lawyer may deter you from going this route but in other situations you may have a solid case and the seller could also be required to pay your legal fees. To determine if this last step makes sense for your particular case, you should contact an attorney experienced in these types of situations.