I Need To Back Out Of An Agreement To Sell

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I signed an agreement to sell property yesterday, and I have changed my mind about it. What do I need to do to get out of the agreement?


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Legally, you cannot be forced to perform a contract (interestingly, that principle goes back to the 13th Amendment of the Constitution which prohibits slavery). Just tell your agent, or if you don’t have one, just tell the buyer that you want out of the contract. There is no legal need to provide a reason to back out unless you have a good one, like the buyers' didn’t get financing or missed some crucial payment deadline.

How you cancel the contract and the consequences of doing so should be spelled out in the terms of the sales agreement. Chances are you will have to refund any deposit or earnest money you have received, and you may have to refund any payments the buyers have made to inspectors. Obviously, the sooner you back out of the agreement, the less likely you are to incur costs of the buyers' reliance on the contract.

Most contracts, especially real estate contracts, make provisions for breach – typically those we have just described. If there are no provisions in your sales agreement dealing with breach, you must look to common law contract principles. Generally, if you breach a contract you must pay the other party

damages in an amount that will put him or her in the position he or she was in before signing the contract. This is why you must refund any payments the buyer has made to you. If the buyer has reasonably relies on the contract in such a way as to change his or her position, for the worse, then you must restore the buyer in that way as well. This is why you may have to pay the costs of an inspector, if you back out of the agreement. In reasonable reliance that you would follow through on the contract and sell them the house, the buyers hired an inspector. If, at the end of the day, they don’t own the house, they are in a worse position than before in that they are out the cost of the inspector.

So, then what’s the difference between common law and what’s in the typical contract? Well, contract law allows parties to agree to almost any terms they want. This means that your sales agreement could have terms that say either party can back out of the contract within three days of signing, without having to refund any money to the other party. The agreement could say you have to refund the deposit, but not the costs of reliance. This is why it is worthwhile to read the terms of your contract carefully, you may be able to get out of it for less money than you would otherwise.

Answered almost 8 years ago
Anonymous

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Depending on your reason for wanting to get out of this agreement, definitely speak with the agent and/or broker that has your listing and ask about cancelling or perhaps remove from showing.

Have you decided not to sell at all? Tell them you have decieded not to sell your home and will not be able to uphold the terms of the listing contract (selling when an able, willing buyer has been found).

Have you decided you do not want to sell with that particular broker/agent? Speak to them about the reasons, they may be able to address the problem.

A buyer has approached you about purchasing and you think that firing the broker/agent will save you the compensation, if any, due them. I wish you luck.

I don’t believe that a reasonable reason would be met with a unreasonable demand from the broker/agent.

Answered almost 7 years ago

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