It is far more common for buyers to back out of a contract than sellers. But it does happen. For whatever reason, sometimes sellers get cold feet, are unable to find a replacement home, or they are unhappy about the sales price or the repairs the buyer is demanding. And sellers are entitled in some circumstances to get out of the Contract. But for the most part, sellers better be sure of what they are doing because, once under contract, it may be very hard and costly to get out.
In the current Illinois Multi-Board Residential Real Estate Contract 6.0, there are contingencies sellers can rely on to back out. For instance, under the inspection contingency, if the parties are unable to resolve inspection issues within a certain time period, either party can cancel the contract. So if the seller wants the buyer to assume the discovered mold problem, but the buyer is insistent that the seller remediate the mold, and nothing has been resolved between them within 10 business days of the contract being accepted, then the seller can cancel.
Sellers can also rely on a purchase contingency. If the seller needs to find its own new home, a purchase contingency can be created, which allows the contract to be terminated in the case that the seller is unable to find another home by a certain date. But aside from that, unless the buyer defaults, a seller is usually stuck with the terms of the negotiated contract, and the only way out would be to breach it. However, a seller’s breach is almost always considered bad faith.
Further, most sale contracts, including the Multi-Board 6.0, allow buyers to sue for specific performance, which could result in a court ordering a seller to complete the transaction. If a buyer has met all its contingencies and is ready and able to close, but the seller suddenly gets cold feet or doesn’t show up, this could result in the seller being ordered to sell, as well as being ordered to pay a buyer’s consequential damages and attorney fees.
Sellers who want to back out also need to remember that they could still be responsible for paying the sales commission if they signed a listing agreement and their broker brought them a buyer that was ready to close. The broker did their job, and the Seller must pay them for it.
Still, Sellers occasionally ignore all the legalities and default. Depending on the kind of buyer, it might be enough for a seller to just apologize and appeal to the buyer’s emotions. Most likely though, if a buyer has invested time, effort, and emotion into their anticipated purchase, the only thing that will compensate them is money, or a long drawn out lawsuit.
If you are selling your home and want to make sure you are protected or have a sufficient out in the contract, call Lavelle Law and ask to speak with one of our real estate attorneys to schedule your complimentary one-hour consultation. Attorney Kelly Anderson can be reached at (847) 705-7555 or firstname.lastname@example.org.