Did you recently have a buyer back out of your contract with them? It isn’t uncommon! Buyers back out of home purchases often, and many times with little notice! In today’s post, I’ll share some practical tips that will address the most common questions you will have!
Can A Buyer Back Out of Closing?
Let’s start off with the tragic truth. Contracts generally are written to favor the home buyer and because of this, there are many contingencies and “exit clauses” that a buyer could use to back out of a contract.
When they actually back out is largely dependent upon the contract that you have written with the Buyer. This is why it is critical that you use a State Approved contract, and be very wary of “fly by night” Buyers who use one page contracts or contracts downloaded from the Internet.
In Arizona, State approved contracts (like the type I use at KarlBuysHouses) are reviewed by teams of attorneys to ensure that equal provisions and protections are given to both parties.
How Often Do Buyers Back Out Of Closing?
This depends on several factors. It isn’t rare, but it isn’t often.. if that makes sense. It largely depends on the way the contract is written. If the contract is written poorly, or has many “exit clauses”; but is perceived as a “good deal”.. then a Buyer will usually stay the course.
However, no matter how well the contract is written, or how much earnest money deposit you contract in the purchase contract.. if a Buyer wants to cancel and back out of a home purchase.. there is little that can practically be done.
Can Seller Sue Buyer For Backing Out Of Closing?
It depends largely on the way your contract is written as to what is possible. For Arizona contracts that are produced by the Arizona Association of Realtors; there is a provision limiting lawsuits to arbitration.
If you sustained damages over $2500 then you would be eligible to take the case to the Pima County Superior Court (if here in Tucson) otherwise, you would agree to arbitration. These numbers change from location to location, and contract to contract.
I’m not an attorney, and I can’t give you legal advice. However it is important to remember that while you are trying to sue someone for failing to close on your property, you must take your home off the market while attempting to settle the dispute in court.
Did Your Buyer Back Out?
As I examined the Tucson Multiple Listing statistics, I noticed today that there were 16 families who had their properties go “Back On The Market”
What this essentially means is that 16 Buyers backed out of the contract during the inspection period (most likely) and that those listings are now available for sale. Another thing to note is that there are 17 properties that Cancelled their contracts with their Realtors.
See Related Article: How To Sell Your House Without Any Property Showings
This is just ONE day’s activities from the Tucson MLS. Over 32 families that weren’t able to sell their properties in one of the best markets that we have ever had.
If you have a property that you want to sell, but are hesitant to have anyone look at it, why not tell me about it here? or call me at (520) 403-6227!