“Fear is a priceless education.” – Lance Armstrong
You’ve done it. You’ve found a buyer to purchase your home. In fact, he’s even signed the purchase agreement. All should be grand. Then it hits – a major case of seller’s remorse. What should you do now? Call the buyer to back out of the sale?
Before you make that “I’ve changed my mind” phone call and hear screaming on the other end of the line, evaluate the downstream effects of what could happen. Are you prepared to handle a “worst case scenario” of consequences? Let’s evaluate what could happen if you do back out.
First, realize that cold feet are the norm for both sellers and buyers. Usually this malady first hits buyers, in part because they’re writing the check for the earnest money deposit, applying for the loan — circumstances that focus on parting with money!
Sellers, on the other hand, usually have their major case of cold feet when they go in search of a replacement home, make arrangements for moving and/or when they start to pack things up. Unfortunately, this may not be early in the sales transaction causing the buyer’s response to be anything but understanding. That’s why it’s important to know what recourse the buyer could have against you if the sale is not completed.
Depending on how the purchase agreement is written, the buyer could sue you for specific performance. This means that the buyer would take you to court to force you to perform specifically as you agreed you would. In other words, sell the property to that buyer. Not only would you need to mount a legal defense, you could end up parting with the house after all.
The buyer could also decide to sue you for costs and damages. Depending on what the buyer has done towards closing the sale (outlay of loan costs, money for moving arrangements, etc.) you might be responsible for reimbursing those costs to the buyer.
Lastly, backing out of the sale could cause you costs of sale, even though you’ve decided not to sell. The listing agreement you signed with the real estate agent more than likely has a provision stating that if he/she finds you a “ready, willing, and able buyer” who makes an offer you accept, you could be responsible for paying the commission if you back out.
When dealing with a case of seller’s remorse, don’t forget that your initial intention was to sell. If you back out now and later want to sell, you’ll need to go through the entire marketing, waiting, negotiating, and closing process all over again. If nothing else, this dose of reality should help you complete the sale now in order to move on with your life