In most states, home buyers have the protection of a cooling off period. The details vary from state to state, and a cooling off period doesn’t apply to auction sales, but the key point is that if you have a change of heart it can be possible to back out of a purchase.
What’s less well known is that the seller of the property may also be able to wriggle out of a contract.
The contract is legally binding
A contract of sale is a legally binding document. So once both parties have put their name to it, it’s no mean feat to walk away. But it can be done.
If the contract features a clause that allows the seller to back out – or ‘rescind’ on the contract, they can refuse to go ahead with the sale. That said, there needs to be reasonable grounds to do so. A simple change of heart won’t cut it.
If there are no reasonable grounds, what happens from here depends on the buyer. Some may sympathise with the seller’s situation and walk away from the sale. After all, there will always be other properties.
However, others may ask their lawyer to issue a letter of demand to enforce the sale. This can be the case if the buyer suspects the seller has plans to relist the property to secure a higher price.
At the very least, a jilted buyer should be able to recover the costs of the purchase to this point, such as pre-purchase inspections and conveyancing fees.