Can you back out of selling a house before closing? Can you cancel escrow as a seller? In this video, I discuss the process of backing out of a contract as a seller and the implications of doing so if you haven’t built in specific contingencies to protect yourself.
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Can seller back out of home sale before closing?
Traditionally speaking, a seller can not back out of escrow after accepting an offer unless they have built in contingencies that allow them to do so. An example would be, a contingency for finding a replacement home. This contingency would allow the seller of the property to back out of the contract and use that as their reason.
In my experience, most sellers don’t put any contingencies in the contract to protect themselves like that because they have no intentions in not selling. In those cases, the seller would be contractually obligated to sell their home per the contract.
Can you back out of house before closing?
As a buyer, yes you can back out of a house before closing as long as you haven’t released your contingencies on the purchase. If you have released those contingencies, then you can still cancel but you could risk losing your escrow deposit by doing so.
As a seller, you can’t really back out of selling your home unless you have a contingency allowing you to do so. The residential purchase agreement in California doesn’t allow a seller to cancel escrow without having one in place which means that you would contractually be obligated to sell your home to the buyer.
What happens if seller backs out before closing?
If the seller chooses to back out before closing then you would need to likely need to hire an attorney to force the hand of the seller. In most cases, the seller wouldn’t have much ground to stand on as long as you met your end of the purchase agreement and the court would most likely stand in your favor either forcing the seller to sell or pay you for damages.
Are you considering buying a home or selling a home and have questions, if so, please comment below or contact me directly.
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