I’ve changed my mind about selling my home. Can I back out of the sale contract?
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Dear Real Estate Adviser,
I signed a contract to sell my home and immediately realized I had made a mistake. I don’t want to sell. What are my options to get out of this?
This is surprisingly common, particularly for sellers who have lived in one place for a long time and have strong emotional attachment to a home. But it’s also problematic. Signing a contract to sell a home, you see, shows clear intent and is a legally binding pact between you and the homebuyer.
Obviously, you would be in default and leave yourself in a legally vulnerable position. That doesn’t mean, however, you can’t handle this the old-fashioned way: Buy yourself out of it.
That is, if you really, really want to. Maybe it is time to shop around for a new home and mortgage.
Why the frozen feet?
But before you put the kibosh on the sale, I suggest you revisit all the reasons — the physical or mental list of pros and cons — you compiled for putting up your home for sale in the first place. People who re-examine these motivators will often realize, albeit grudgingly, that selling was actually the right decision given changes in life circumstances and needs.
Ask yourself this question: Where do I see myself in five years?
You can’t rescind for no reason
And in case you’re wondering, there’s no such thing as a “right of rescission” cooling-off period that would allow sellers to cancel certain types of real estate sales and loans within a set amount of business days, as there is for buyers in some cases.
Consider the jilted buyer’s costs
If you’re staying put, the good news is that backpedaling sellers, such as you, are rarely forced to sell, though they can pay through the nose if the jilted buyer is hugely inconvenienced — read: “damaged” — by the decision. Not only would you be required to return the earnest money, you may have to also reimburse the buyer for such things as:
- Temporary housing rental.
- Lost deposits.
- Storage costs.
- Inspection and survey fees.
If you balk, a court could award these, plus legal costs, to the buyer.
Other people are affected
Realize, too, that the buyer may have had a devil of a time coordinating the sale and move-out of a previous home with the anticipated purchase of your place and may not be in good humor about your change of heart. Moreover, your own listing agent could sue for lost marketing expenses and commission, since he or she apparently worked hard to bring you a ready and able buyer under what was probably an “exclusive right to sell” contract.
Of course, the words “may” and “could” are key here. Most of the time, brokers and buyers will simply shrug their shoulders and move on, as long as their expenses are reimbursed, though you certainly can’t count on skating away unscathed.
Read the sale contract
Before you notify the buyer, check to see if your contract affords you a contractual out such as a stipulation stating that you first must find an adequate replacement home (and darn, you just couldn’t find one), or gaining required sales approval from family members. Any such exception would have had to be clearly specified in your sales contract.
While buyer’s remorse is more common, seller’s remorse does happen, and for a variety of reasons:
- Some owners simply feel they should have gotten a better price and were taken advantage of.
- Others don’t want to sell at a reduced price after a surprisingly low appraisal.
- Some have a practical reason: For example, a new job didn’t materialize or work out.
- More often, though, the overwhelming emotions of letting go of the beloved family homestead tend to reign in such cases.
But maybe you should let the house go
If you’re still intent on canceling the deal and staying put, make sure everyone involved gets paid what’s due. Otherwise, buy yourself a warm blanket for those cold feet, start looking for a great rate on a mortgage and get ready to make new memories in your next home.
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