Imagine this scenario – you’ve been searching for your dream home for years. You’ve contacted dozens of property agents, you’ve subscribed to every property newspaper possible, and you’ve spent most of your weekends visiting open homes, all in the hopes of finding the perfect abode. Then one day, you finally find it, it’s perfect and it’s in your price range. You put in the offer, it gets accepted and just as you’re about to clink your champagne glass, the seller gets cold feet.
Fortunately, this is a very uncommon scenario, however, when it does happen it can leave buyers baffled. After all, in property matters, signed agreements are binding no matter what.
But, the questions remains, can sellers back out at the last minute and what are the consequences involved? Below, we take a look at when sellers can and can’t back out of a home sale, and how buyers can handle a seller who bails at the last minute.
There are many reasons why a seller might back out of a sale at the last minute. In most cases, the seller simply hasn’t managed to find a replacement home. But is this reason enough for the seller to be let off the hook without any ramifications?
Well, the answer is yes in the following instances:
- The contract hasn’t been signed. Before the Offer to Purchase or OTP has officially been signed by both parties, the seller and buyer have the option to back out of a sale at any time. Once the OTP has been signed and accepted by both parties, it becomes a legal binding contract and both parties are required to fulfil their responsibilities as set out therein.
- The seller has stipulated an escape plan in the contract. Sellers can place addendums within the contract that say they can back out without penalty.
- Contract terms can not be met. The OTP will contain all the terms and conditions pertaining to the sale as well as any suspensive conditions that should be met in order to make the agreement binding and enforceable. If one or more of the suspensive conditions can not be met, the buyer or seller are legally allowed to back out of the sale.
But aside from the above reasons, once a real estate transaction has a fully executed purchase agreement, it’s not that easy for a seller to bail out. In most cases, the cancellation of an executed purchase agreement is not admissible in South African Law and would require a court order to bring about any changes.
If you have any more questions about the conditions of cancelling the sale of a property, feel free to contact us at firstname.lastname@example.org