After many weekends and evenings driving around eastern Georgia, your clients finally found a home that checks off the many items on their wish list. They agreed to the terms of the contract, and the real estate transaction process was set into motion. Suddenly, the sellers contacted you to say they were not going through with the sale. Your clients felt crushed and wondered if they could sue the seller for breach of contract.
While filing a lawsuit may be one option open to the buyers, as a real estate professional, it is important that you guide them in the right direction. This begins with obtaining as much information as possible about the nuances of a real estate sales contract.
The most common reason why sellers back out of a done deal is that they cannot find a new home that satisfies them. Rather than continuing the search, they pull out of a sale when it becomes evident that someone else is about to own their home. However, this may not be a good enough reason to break a legally binding contract. Some possible factors that would excuse the sellers from pulling out of the sale include these:
- Either your clients or the sellers did not sign the real estate contract.
- The sellers’ attorney advised them to stop the sale within the five-day review period included in most standard contracts.
- Your clients were not able to obtain financing before the deadline included in the contract.
- The sellers included a contingency in the contract that released them from the sale under certain circumstances, such as not finding a new home that satisfied them.
- Your clients’ inspection of the home yielded information about repairs the house needed and which the sellers were unwilling to make.
If none of these factors exists, your clients may have a good reason to pursue the matter in civil court. However, the process could take years, and they would likely prefer to continue looking for a home.
On the other hand, if they have already spent time and money on the purchase of this house, they may want to recoup their losses. For example, they may have already sold their home, purchased new furniture or rented a storage unit. You may suggest they discuss with an attorney the options of suing for breach of contract to try to recover those losses.