Can I Back Out of a Sale if I Already
Accepted an Offer?
July 27, 2022
The decision to sell your property never comes easily. That is why it is not uncommon for sellers to wonder before the sale is complete, “Can I back out of a sale if I already accepted an offer?”
Generally speaking, the answer to that question is “yes.” However, you may not be able to back out without penalty. Regardless of the reason for wanting to back out of a real estate contract, you need to understand the possible consequences of backing out.
If you are a seller who accepted a buyer’s offer and is considering canceling the deal, it’s important to discuss your options with a real estate attorney. At Curiale Hostnik PLLC, our attorneys represent buyers and sellers in real estate transactions in Tacoma and surrounding areas throughout Pierce County in Washington.
Reasons a Seller Might Want to Back Out
There are several reasons why sellers might want to back out of a real estate contract, even after they have already accepted an offer. Common reasons for backing out of a home sale include:
The seller receives a higher offer from another buyer after signing a purchase agreement
The seller has nowhere to go because they were unable to find a new home
The home’s appraisal comes in too low
The seller changed their mind and no longer wants to sell the property
There has been a substantial change in circumstances
The seller is dealing with a difficult buyer who makes unrealistic or unreasonable demands to complete the deal
The seller does not accept the buyer’s requests for further negotiations (e.g., to make repairs or lower the price)
The purchase agreement is legally binding, which makes it difficult for sellers to back out of a sale when they have already accepted a buyer’s offer. Some circumstances, though, may warrant backing out without serious ramifications.
Sellers Backing Out Without Penalty
Backing out of a home sale after accepting the buyer’s offer is anything but easy. Generally, once a purchase agreement has been signed, it is difficult for sellers to cancel the deal without facing serious penalties.
However, purchase agreements often contain contingencies that may warrant backing out of an accepted offer. Below are some of the scenarios in which a seller may be able to legally back out of a real estate sale without penalty:
The purchase agreement is not in writing. Keep in mind that verbal agreements are quite uncommon nowadays, especially when it comes to the sale of real estate.
The agreement contains a suitable housing contingency. The contingency in the purchase agreement may allow the seller to back out of the sale or extend the closing date if they are not able to find a suitable replacement home.
The agreement sets an attorney review period. A seller may be able to back out of an accepted offer on a property if they are within the attorney review period. Most purchase agreements provide a five-day attorney review period.
The buyer did not meet their obligations. If the buyer fails to meet the obligations outlined in the purchase agreement, the seller may be able to legally back out of a sale.
The seller refuses to pay for the requested repairs. If a buyer requests repairs but the seller is unwilling to pay for them, the seller might have grounds to cancel the deal.
These are some of the examples of situations in which a seller may be able to back out of a sale. However, each case is unique, which is why you’ll need to discuss your particular situation with an experienced real estate attorney before backing out of a sale.
Possible Consequences of Backing Out
Even if backing out of a sale is possible, it can result in costly consequences. Often, sellers who back out of a home sale after signing a purchase agreement can be sued for a breach of contract. If a buyer’s breach of contract claim is successful, the seller could be forced into “specific performance.” In other words, the court could order the seller to complete the sale even if they decided to back out of the deal.
The seller might also be ordered to:
Pay the buyer’s attorney fees and legal costs
Return the buyer’s deposit plus interest
Pay for the buyer’s lost equity, if any
Reimburse the buyer for the expenses incurred when performing appraisals and inspections
Pay for any other reasonable expenses incurred by the buyer
Since breach of contract cases are handled by civil courts, the seller cannot be sent to jail or prison for backing out of a sale, even if they already accepted the offer. However, even though there is no criminal liability for breaching a purchase agreement, the civil consequences can be severe.
Legal Guidance You Can Trust
If there has been a change of circumstances or you no longer wish to sell your property for any other reason, you might wonder about your options for backing out of a sale. Things can get even more complicated if you have already accepted an offer. If this sounds like your situation, contact Curiale Hostnik PLLC. Our real estate attorneys in Tacoma, Washington, will evaluate your specific situation and advise you on your options.