It’s every seller’s nightmare: After weeks or even months of negotiations, home showings and paperwork, the buyer suddenly backs out of the deal. This can feel frustrating, especially in competitive real estate markets like Washington. You may be wondering whether you have any legal recourse. The short answer is yes.
The first thing you need to do is find out why the deal fell through. Did the buyer exercise a contingency, or did they simply change their mind? Review the purchase agreement to ascertain whether the buyer was within their rights to walk out or it was in breach of the contract. If they went against the terms of the purchase agreement, you may have remedies. Let’s look at some options.
Hold on to the earnest money
Buyers typically provide an earnest money deposit to show they are serious. The amount varies, but it is usually 1 to 3% of the purchase price. If the buyer backs out of the deal without a contractual reason, you may be entitled to keep this deposit as compensation. However, if the buyer disputes this, the funds may be held by a neutral third party (like an escrow agent) until the matter is resolved.
Quickly relist the property
Time is money in real estate. If a deal falls through, relist your property as soon as possible to increase your chances of securing another buyer. You might even get a better offer with effective pricing or marketing strategies.
Consider legal action
You may have grounds to sue for damages if the buyer’s breach caused you significant financial harm. For example, if you missed out on a higher offer, you may be entitled to compensation for the lost time and money. The court could even order the buyer to complete the purchase.
That said, litigation can be costly and time-consuming. Therefore, it helps to weigh the potential benefits against the risks.
A buyer backing out of a deal can feel like a setback, but it doesn’t have to detail your plans. Reaching out for legal guidance can help you understand your rights under Washington law, protect your financial interests and take proactive steps to protect your interests.