Can a Seller Back Out of a Purchase Agreement?

A purchase agreement legally commits you to the sale of your real estate.

Once a purchase agreement is signed, both the seller and the purchaser are legally bound to complete the transaction. Clauses and contingencies can be included, and generally benefit the buyer; however, some clauses give sellers an "escape" as well.

Time Limit Contingency

Purchase agreements can include a time limit as a contingency for purchase. If the time limit is exceeded and the sale has not finalized, the contingency allows the contract to expire without consequences to either the seller or buyer.

Estate Contingency

If the property is part of an estate sale, the purchase agreement might be contingent upon the agreement of other family members. If all members of the family do not agree to the sale, this contingency allows the seller to back out of the purchase agreement.

Consequences

Laws vary state to state, but generally, sellers cannot back out due to change of heart without legal and financial consequences. Without these types of escape clauses, the seller can be sued by both the purchaser and the seller's own real estate agent.

References

• Lending Tree: Real Estate Advice
• Realty Times: Getting Cold Feet on a New Home Purchase?
• Houses Under Fifty Thousand: Purchase Agreement
• Lending Tree: Ask an Expert: Seller Backing out of Contract