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The buyer offered everything
you asked for. So the wheels are in motion to close the sale. But all at once a
wave of "seller's remorse" flows over you. You realize that you really
don't want to sell the property. What can you do? And if you do back out of the
sale, what are the possible repercussions?
Contrary to popular belief, a
seller never has to accept an offer presented--even if it's for exactly what you
told the agent you wanted. (The seller might be responsible for paying the
agent's commission, however, depending on how the listing was written. This is
because the agent has done what he set out to do--to provide the seller with a
"ready, willing and able buyer.")
Secondly, while "seller's remorse" may not occur as often as buyer's
remorse, it does occur. It often happens when the seller realizes how tedious it
will be to find another home and to move there and then estimates the potential
costs involved in both. Just as buyers with second thoughts need to rehash why
they wanted to purchase a particular property, sellers need to remember their
initial reasons for selling, then consider not only the time, effort and money
already expended in the selling effort but also the downside of not following
through with closing--including the possibility of legal action by the buyer.
What legal recourse would a buyer have against a seller who backed out on
selling his property? That depends on how the purchase and sale agreement is
written. For example, the agreement might state that upon any default, the
defaulting party would forfeit the right to any earnest money and/or down
payment (paid or received) and that the aggrieved party could seek legal
remedies. Although not too common, a buyer could petition the court to force the
sale of the property (a "specific performance" suit); perhaps the
buyer could seek compensation for damages if he had expended money in
anticipation of closing on the property. For the seller who declines to sell, a
bottom-line, worst-case scenario might include: the buyer could sue the seller;
the seller would perhaps need to pay legal costs to defend himself; and the
seller could be required to pay the sales commission--all without the benefit of
proceeds from the sale.
If you're a seller who's considering bailing out, the first person to call is
the real estate practitioner involved in the sale. The call is recommended--not
so the broker or associate can talk you out of it--but because he may have
late-breaking and pertinent information that could impact your decision and its
consequences. Perhaps the buyer just found out that the financing he needs is
much more expensive than he expected, that his job transfer has not yet been
approved; perhaps the buyer himself is suffering a simultaneous case of
"cold feet."
Just as gathering information
was important before you accepted the buyer's offer, it's equally important to
check and recheck the facts before making the crucial decision to call the sale
quits.
Don't forget that if you do back out of the sale, it doesn't necessarily mean
that you can jump quickly back into the sales arena on your own and without
consequence. The listing agreement you signed previously will dictate the time
period during which you'll be liable for the sales associate's commission. This
provision is included to deter sellers from trying to become for-sale-by-owners
late in the process in order to avoid paying the sales commission.
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