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The risks of backing out of escrow.

Everyone knows that a home sales transaction is a delicate process. It involves many steps and needs to be carefully handled by the professionals to be successful. Once the buyer and seller sign the contract, the transaction is considered ‘in escrow.’ Once this step has been reached, funds are deposited into an account that’s overseen by a third party and both the buyer and seller are firm on their positions.

But, situations do occur where the seller suddenly gets cold feet about selling their home. Whether due to emotional attachment, a higher bid coming in at the last minute, or other reasons, sellers may occasionally want to back out of the real estate transaction. The question is, can they?

The answer is yes, in many cases. Often, sellers who choose to back out of selling their homes usually get to keep their homes. But by backing out, they are required to pay the buyer for ‘inconveniences’, which can include:

• The buyer’s temporary housing costs
• The buyer’s inspection and survey fees
• Their storage costs
• Lost deposits
• Legal costs
• And more

When it comes to breaking a home sales contract, the seller should expect to pay out a large sum of money for their mistake. This is also the best route to take to avoid legal problems.

Some home sales contracts feature stipulations that provide a contractual out for the seller if for some reason they decide not to go through with the sale. The stipulations generally cover situations such as the seller not being able to find and adequate replacement home, or failing to gain required sales approval for the property from other family members. Whatever the stipulations are, they need to be clearly specified in the sales contract.

If you’re thinking of stopping the sale of your home, look over the contract first to see what legal and financial implications you’ll face.

Are you thinking of selling? If so, it’s time to contact a real estate professional. To get started, contact Jenn Blake Real Estate Group at Pacific Sotheby’s International Realty in San Diego, California at 858-663-6788.