Can a Seller Back Out of an Accepted Offer on a House?

Sellers can back out of accepted house offers in select few cases where the contract and its contingencies haven’t been fulfilled.

Table of Contents:

Can a seller pull out after accepting an offer?

Can a seller retract an offer on a house?

Can you change your mind after accepting an offer on a house?

Can you back out of an accepted offer?

What happens if the seller pulls out of a house sale?

What happens if a house seller changes their mind?

Can a seller back out right before closing?

What happens if a seller refuses to close?

Can you pull out of a house sale before settlement?

Can a buyer back out of purchase agreement?

How often do buyers back out?

Can a house under contract be sold to someone else?

Summary

Can a seller pull out after accepting an offer?

When you accept an offer on a property, there’s typically very little chance the buyer will back out of the transaction. The party who is much more likely to changes their mind and pull back from the deal is the seller. There are ways for the seller to retract from the offer but backing out of an accepted offer as a seller can have many negative effects and even legal repercussions if the seller isn’t backing out for one of the following reasons. 

1. The contract they had in place with the buyer was specifically worded in a way that allowed the seller to back out of the offer 

2. The buyer is found to be in violation of the contract currently in place

3. The buyer has committed fraud and the seller has undisputed evidence regarding this

All three of these reasons will allow the seller to retract their acceptance of an offer on their house unscathed. However, if the reason they’re looking to get out of an already accepted deal isn’t listed above, sellers may find the buyer is able to take legal actions against them if they back out of the contract or purchasing agreement.  

Can a seller retract an offer on a house?

Sellers always have the option of retracting their offers, or rather their acceptance of an offer on their property if certain contingencies are met. These contingencies must also be outlined in the current purchase agreement, meaning that the only cases in which legally sellers could back out of their acceptance of a certain offer are if certain aspects previously outlined and finalized in the purchasing agreement aren’t met before the sale. One of the most common such terms includes the stipulation that the seller needs to find a new home before the sale of the previous house goes through. If for whatever reason, the seller is unable to find such a house then they can back out of a previously accepted house offer so long as it was part of the contingencies outlined in the initial purchasing agreement. 

Can you change your mind after accepting an offer on a house?

As a seller, you can always change your mind after accepting an offer on a house, but unfortunately changing your mind doesn’t guarantee you’ll be able to back out of the agreement especially if a house purchasing agreement is in place. The reality is that the purchasing agreement for the house is there to protect both the buyer and the seller, and the termination of the agreement without a valid reason on the part of the seller could result in the buyer taking legal actions against the seller. Therefore as a seller it’s important to work with your real estate agent to draft a house purchasing agreement that has contingencies in place allows you to change your mind and potentially back out of an accepted offer under certain terms and conditions. 

Can you back out of an accepted offer?

As a seller, you’re able to back out of an accepted offer if certain contingencies outlined in your purchasing agreement aren’t met. One of the most common examples of this is having in place a contingency stating that you need to purchase a new home for the original sale to go through. In cases where such conditions aren’t met, you have a reason to back out of an accepted offer without having to worry about facing legal repercussions. In other cases, if as the seller you can prove that the buyer has gone against the purchasing agreement and has violated its terms and conditions, or that they have in one way or another tried to commit fraud against you and you as the seller have irrefutable proof of this, then once again you’ll be able to back out of the purchasing agreement in place. 

Cases in which backing out of an accepted offer is legal and possible:

Cases, where contingencies set out in the purchasing agreement, aren’t met

Cases where the buyer has committed fraud against the seller and the seller has proof of the fraud case

Cases where the terms and conditions of the purchasing agreement have been violated by the buyer

What happens if the seller pulls out of a house sale?

What will happen in cases where the seller pulls out of a house sale will entirely depend on whether the seller is pulling out for a valid reason which is stipulated in the purchasing agreement or whether they are simply pulling out without a valid reason in place. 

In cases where a valid reason exists, and the actions of the seller coincide with the terms and conditions as well as with the contingencies set out in the purchasing agreement then the buyer will be unable to do anything to change the mind of the seller. In cases where the buyer has simply changed their mind and decided to back out of the house sale for no apparent reason then the buyer is able to take legal action against the seller. The main reason for this is that the purchasing agreement is a legally binding document and as such, once the agreement is put in place neither party can back out without first considering the stipulations previously set out within the document. 

What happens if a house seller changes their mind?

A house seller is always able to change their mind about the sale of a property but depending on the stage in the property sale that they are on, they may find that changing their mind does not great them the ability to pull out of the sale without having to face some legal and possibly monetary repercussions. For example, if a seller changes their mind about selling the house at any stage prior to the acceptance of an offer and the signing of a purchasing agreement, then that change of mind should allow them to simply back out of the deal without having to face any consequences. This is because the purchasing agreement is the first legally binding document for the sale of the property and if it has not yet been signed then there is no legal contract binding the seller to their choice to sell. This means that before the purchasing agreement is signed, they can back out of the deal at any time. By contrast, if the purchasing agreement is already in place, then the seller is only able to back out of the sale of the house without having to face legal repercussions if the terms of the purchasing agreement aren’t met. These terms are normally known as contingencies, and they are put in place to protect the seller from having to complete a sale that no longer serves them. Other cases in which they can back out of the sale of the contract include cases where the buyer is found to violate the terms and conditions previously agreed on in the purchasing agreement, or if there is a clear case of fraud that the buyer is partaking in to defraud the seller. Both of these cases will give the sellers the legal right to back out of the sale of their house. 

Can a seller back out right before closing?

The only three conditions under which the seller can back out of an accepted offer right before closing are the ones outlined below. The reason for this is that even before closing there is normally a purchasing agreement in place to protect both the buyer and the seller from having the other party back out of the deal for no apparent reason. 

1. Backing out of the sale is stipulated in the contingencies of the purchasing agreement

2. There is a breach of contract by the buyer

3. The buyer is committing fraud against the seller and the seller has legal proof of this

What happens if a seller refuses to close?

If a seller is refusing to close, then as the buyer you may be forced to take the seller to court to force them to close on the house. This can be an expensive process and where it can be avoided it should as it can cost the buyer thousands of dollars. In some cases, courts may force the seller to pay for damages to the buyer but that isn’t always the case. Therefore, in the long run, while taking the seller to court may force them to close on the house it may also result in the buyer losing upwards of $50K on legal fees. 

Can you pull out of a house sale before settlement?

If no legal contracts have been exchanged, this includes a purchasing agreement, then the seller can pull out of the house sale before the settlement without having to face any legal repercussions. If, however, settlement or closing comes after a purchasing agreement has been signed then the agreement which is a legally binding document, may mean that the seller is forced to go through with the sale of the property if all the contingencies are met. Therefore, it’s important as the seller to always be sure that you wish to proceed with the sale or to place relevant contingencies in the purchasing agreement that allow you to back out of the house sale when necessary. 

Can a buyer back out of the purchase agreement?

In most cases, buyers can walk away from agreements more easily than sellers are, but it does not mean that they too won’t face some repercussions for backing out. Normally, there is an earnest deposit put down by the buyer when they decided to put an offer on the house. That earnest deposit isn’t returnable, meaning that if the buyer backs out for no good reason, they may be losing thousands of dollars. Again, all of this is stipulated in each individual purchasing agreement and may vary from home to home which is why it’s important to negotiate these things upfront prior to signing any legal documents. 

How often do buyers back out? 

It’s not very common for homes under purchasing agreements to fall through. This is mainly because the contingencies put in place by the two sides are usually met and as such, there is no legal reason for the closing of the sale not to go through. In fact, according to some statistics over 96% of the homes under contracts go through. Having certain stipulations that deter the buyer from backing out would be a great way of reducing the chances of a buyer walking out prior to the sale of the house being completed. One of the most common ones of these is to add a non-returnable earnest deposit deterring buyers from backing out without a valid reason. 

Can a house under contract be sold to someone else?

In some cases, it’s possible for houses under contract to be sold to someone else. This is dependent on whether a clause exists in the purchasing agreement that allows the seller to continue accepting offers or selling their home after the buyer has disclosed their interest. If you’re looking to purchase a home but you see that it’s already under contract you have no reason not to inquire about the house. 

Summary

Backing out of a house sale that has previously been agreed on under the purchasing agreement can come with a lot of stipulations. Therefore it’s important to only sign legal documents regarding the sale after you have ensured you’ll be selling. Adding contingencies gives you the option to back out of the sale which can be important as the seller of a property.