We’ve spent several weeks telling you about all the ways a real estate contract can be canceled by either the buyer or the seller, but of course that cancelation can have consequences, and we at ZinnLaw of Fort Myers, FL want you to know exactly what they may be. In these circumstances both the buyer and the seller risk losing money, and/or going to court. That’s why you want one of our experienced ZinnLaw real estate attorney’s by your side before you make any moves to cancel the contract. Read on to learn more.
When buyers lose money to get out of a sales contract
Unless a contingency is specifically written into the sales contract, buyers are legally bound to follow through on the purchase agreement. That means the sale will proceed. However, you can still walk away, but you will lose the earnest money you paid down when you made the offer. Earnest money is usually 2-5% of the home’s purchase price. For a $250,000 home, that could be between $2,500 and $6,500.
Can a seller sue a buyer who walks away?
In short, yes. Sellers can sue buyers who don’t follow through with a sale, but it’s rare. Some sales contracts say that a seller’s only recourse is keeping the earnest money in the event the buyer wants out. These contracts typically say the seller agrees not to pursue legal action in exchange for the earnest money deposit.
Can buyers sue a seller who backs out?
Yes, they can. Buyers have much more latitude to sue a seller who backs out of a sale. If a seller backs out, the buyer will receive their earnest money and they may be able to seek damages or ask a court to order the seller to complete the sale.
Sellers could face a few ramifications for backing out of a real estate deal. These could include:
- Giving the buyer monetary damages
- Returning the earnest money that typically ranges from 1% to 3% of the home’s purchase price as well as other expenses
- Completing a court-ordered sale of the home
Consult an attorney for help
Since there is much variability among real estate sales contracts, it’s best to consult an experienced Florida real estate attorney if you’re having second thoughts about a real estate deal. An attorney can read through your contract line by line, examine the language and identify your options.
In Florida, Brian D. Zinn is an experienced real estate attorney who can help you navigate these waters. With nearly 35 years of litigating experience, we can help you determine the best course of action. Contact us today for a consultation. Call (239) 418-1529 to schedule an appointment.