Sometimes a seller has second thoughts about selling his home and wants to know whether he can exit the transaction without incurring penalties. Perhaps the seller was not really motivated to sell or simply wanted to gauge his home’s value in the current market. A seller has several options for backing out of the deal depending on when he decides that he no longer wants to sell. The seller may or may not be subject to penalties; obviously, the earlier the seller announces his intention not to sell, the less severe the consequences are for both the seller and buyer.
Cancelling a Listing Agreement
A listing agreement is a contract between the seller and the broker. Sellers commonly use exclusive right-to-sell listing agreements which allow the broker to collect a commission so long as a ready, willing and able buyer makes an offer for the home. If a seller gets cold feet and wants to cancel the listing, then the broker is likely eligible to receive a commission payment if he produced a buyer.
The best protection for a homeowner who is not fully committed to selling is to shorten the term of the listing agreement. The seller can negotiate the duration of the listing agreement with the broker. The seller can also request a provision that requires the broker to cancel the agreement upon request.
Changing Your Mind After Signing
If the seller decides that he absolutely does not want to go through with the sale, he should review the contract to see if there are any contingencies that would allow him to back out of the agreement. If the agreement itself does not evidence any unsatisfied contingencies, then the seller would need to breach the contract to avoid selling his home. However, the seller will pay a price for getting cold feet at this stage of the transaction. The buyer can sue for specific performance, which allows the buyer to force the seller to carry out his obligations under the contract. In general, a court will not compel a seller to sell his home. However, the buyer has other means of recouping his losses from the breach. First, the buyer will get his deposit back. The purchaser also has the right to sue for damages for breach of contract. Damages might include attorney’s fees, moving and storage fees, and expenses related to obtaining the mortgage, inspection and survey. The brokerage agreement will also require that the seller pay the broker’s commission fee.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at http://www.markweinsteinlaw.com to find out how they can advise you.