A couple of weeks ago, I received a call from a buyer’s agent, on one my listing sales, that her client wanted to cancel the purchase agreement a week before closing. Her client had changed her mind about selling her house and purchasing my client’s home.
This buyer had entered into a previous purchase agreement on the property and cancelled it during the inspection period, which was perfectly legal. A few weeks later she submitted a new offer, apologized for cancelling and said she couldn’t live without this home. I submitted the offer to the seller and because he wanted the home sold quickly, he wanted to accept the offer. I recommended that we increase the earnest money, make it non-refundable, and remove all contingencies, except financing. The buyer agreed to the seller’s terms.
The property appraised for more than the purchase price and the buyer was fully approved when she requested the cancellation. Her only contingency had run out.
I informed the buyer’s agent that her client would be in breach of contract if she didn’t close, and the seller would not agree to the cancellation. The seller would retain the earnest money per the purchase agreement, and he would most likely sue the buyer for damages. I asked the agent to review the purchase agreement with her client, explain breach of contract, and let me know the buyer’s response.
The buyer was unaware that she could be sued if she didn’t close and she didn’t want to litigate so she closed on the property. When I met the buyer at the closing, she apologized and explained she was just nervous about making a change, but she was very happy to be moving in.
An experienced real estate agent can explain the real estate contracts, contingencies and inform you of your obligations.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.