Purchasing a home is a major event and an exciting time for most Florida homebuyers. Once you have your real estate contract signed, you will likely feel relieved and ready to start planning your move.
But what happens if the seller wants to cancel your real estate contract and no longer go through with the sale? Can they do that?
Contingencies in your contract
A seller can cancel a real estate contract, but only in certain circumstances. Your real estate contract probably contains contingencies, which is language stating when either you or the seller can terminate the contract and cancel the sale in specific situations.
Make sure you read and understand all the contingencies in your real estate contract before you sign it. This can reduce shock and confusion if you find out that the seller is backing out.
Contingencies are for both buyer and seller
The contingencies usually apply to both the buyer and the seller. For example, a contingency clause on your behalf might state that you can terminate the contract if you find out the home did not pass an inspection.
Common contingencies on the seller’s behalf include clauses stating that the seller can back out if you cannot perform some of your duties, such as securing financing.
Other reasons a seller could terminate the contract include not having clear title. A title search is performed as part of almost every real estate sale, and if the search reveals outstanding liens against the home, the seller might be legally prohibited from selling it.
A seller could even cancel the contract if they cannot find a new place to live before your closing date. However, this must be written in the contract as a contingency. If it is not, the seller cannot cancel.
When a seller cannot cancel a contract
One reason a seller cannot cancel a real estate contract is because they receive a better offer. It does not matter if five minutes after signing your contract the seller gets an offer for double the price. They are legally bound to your contract.
The real estate purchase process goes smoother when everyone understands what situations could result in a cancellation of the contract. This is why it is important to talk with a professional about the terms of your real estate contract before you sign.