Some home sales don’t close. Imagine being one of the 7% of home sellers who are in the middle of packing when they get a phone call from their real estate attorney in Bel Air, MD saying that the buyer has backed out of the sale. That’s definitely not a good moment. Plans have been put in place, and now it’s back to square one.
Why Do Home Sales Get Canceled?
There are a few common reasons for the cancellation of a home purchase.
- 33% of buyers cancel a deal when a defect is discovered during a home inspection.
- 21% of prospective buyers can’t obtain a mortgage.
- The buyer loses a job or has some other significant change in their circumstances.
- The buyer cancels because of a contingency clause in the contract.
- The buyer gets cold feet.
Decisions Must Be Made
Now the seller needs to decide whether or not to put the home back on the market.
If the sale fell through because of a home inspection issue once, it will probably happen again. There are normally two ways to handle this situation. The best solution is to fix the problem. If that’s not possible, then the price can be adjusted downward, and future buyers informed about the issue. Most buyers want to buy homes in good condition, but some people will accept a problem in exchange for a lowered price.
It’s usually better to put the home back on the market immediately and look for a second buyer.
Does the Seller Keep the Deposit?
Sellers often believe that they are entitled to keep the deposit, but that’s usually not the case. The buyer is frequently backed up by a contingency clause allowing a sale cancellation under a specific circumstance. A home inspection failure would be a contingency normally included in real estate contracts.
Whether or not the seller keeps the deposit ultimately depends upon the wording of the contract and state law. This question must be settled because the home cannot be officially put back on the market until the contract has been legally canceled and the deposit issue decided.
Michael S. Birch, Attorney at Law, is an experienced real estate attorney in Bel Air, MD who will put your interests first. Real estate transactions are complex whether you are buying or selling. Protect your money and your rights by contacting his office at Michaelsbirchattorney.com.