A home sale or purchase is not complete until both parties have signed all the necessary legal documents transferring ownership of the home to the buyer. Buyers fully accept to buy the house when a contract is signed between both buyers and sellers.
Buyers often have contingency clauses added to their contracts which are legal ways of “backing out”. Common contingencies include:
- 1. Mortgage Loan Contingency
- 2. Home Inspection Contingency
- 3. Sale Contingency
- 4. Appraisal Contingency
Usually, when a deal falls through, it is because either the buyer or seller has a change of mind or certain terms in the contract has not been met.
Once the housing deal falls through, you are back where you started, finding a buyer for your house. This is frustrating and takes time which may affect your plans to purchase another home. You may even lose a lot of money as a result of this.
Negotiating With Your Buyer
There are reasonable steps to take if your buyer wants to back out.
First, make sure that you and your buyer are continuously in touch and updated on communications made between both real estate and also, obtaining copies of all changes or communications made, in writing.
If you or your buyer do not have real estate agents you can try talking and negotiating directly with your buyer to ensure that you fully understand his or her intentions and concerns.
You should check if there are things that you could do to keep your buyer on track to close the housing deal.
Also, check your contract to determine what position you stand as the seller. For example, is there a term or clause in the contract that would give you legal grounds to sue your borrower for breach of contract? Or is there a term or clause in the contract that states the buyer is in default if he or she fails to cancel the deal within the stated time frame after signing the agreement? This reasonable steps may help.
Here are some warning signs that a buyer is about to back out of closing on the purchase of your home:
- 1. Failure to return papers signed, dated and completed as instructed
- 2. Failure to make required payments to third parties (e.g. inspectors, etc.)
- 3. Missing appointments
- 4. Not returning calls
- 5. Numerous requests for contract changes from the buyer’s agent
If you notice these warning signs, it may imply that your buyer is getting cold feet and thinking of backing out of your housing deal. Call your buyer immediately if you’re concerned that the closing of your housing deal will fail.