What to Do if a Buyer Backs Out Before Closing?

Selling a home or commercial property in York is no easy task in today’s housing market. It can take months to receive, review, negotiate, and ultimately accept a buyer’s offer. This process often involves turning down multiple offers, working with attorneys, and catering to a specific buyer’s requests.

We are Pennsylvania business and homeowners too at Mette Attorneys at Law and understand how frustrating it can be when a buyer backs out before closing. Discuss your options for recovering financial compensation or demanding compliance with our dedicated York real estate attorneys today by calling (717) 232-5000 or connecting with us online.

Lawful Reasons to Cancel a Real Estate Closing in PA

Most real estate contracts have certain contingencies, especially related to financing, inspections, and reciprocal home sales. If a buyer backs out before closing under the contract terms, the best option is often working with a York real estate mediator to renegotiate the contract. This might mean lowering the purchase price if an inspector discovers electrical concerns, agreeing to make any necessary repairs before closing or giving the buyer additional time to obtain financing.

Bad Faith Closing Cancellations

Every Pennsylvania contract implies a covenant of good faith and fair dealing. Unfortunately, many buyers back out of closing in bad faith by citing certain contractual contingencies. This commonly occurs if the buyer indeed fails to obtain financing but does not make a good-faith effort to do so. Instead, York buyers might intentionally kill the financing to ‘justify’ cancellation. Sellers’ attorneys often see this when buyers find a better home at a better price after signing the purchase contract. Experienced real estate lawyers can spot these bad-faith cancellation attempts and hold buyers liable.

Options if York Home Buyers Back Out Before Closing

If a homebuyer unlawfully backs about before closing, this is called an anticipatory breach of contract in Pennsylvania. Anticipatory breaches might trigger certain legal remedies, including the following:

• Legal negotiation
• Liquidated damages under the contract
• Right to keep the down payment
• Specific performance
• Demand to return any money expended at the buyer’s request
• Coverage

Your remedies often depend on the extent of your financial damages. For example, if you have a backup offer that goes through, you might ask the canceling buyer to ‘cover’ the difference between the backup offer and the original contracted purchase price. You would not generally be entitled to damages, however, if you manage to quickly sell the home for a higher price.

In some cases, you might demand something called specific performance, which is only ordered at a judge’s discretion. Specific performance requires the buyer or the buyer’s personal representative (see 20 PA Cons. Stat § 3390) to perform his or her obligations under the contract, i.e., close on the home. An experienced real estate closing attorney in York can help you understand and pursue the most favorable remedy in your case.

Discuss Buyer Backouts in York with a Dedicated Real Estate Legal Team

It’s not uncommon for buyers to back out of purchase contracts before real estate closings. Sellers may have various options to obtain liquidated damages – such as keeping the down payment – renegotiating the contract terms or even forcing buyers to close. Discuss the best remedy in your case with our experienced York real estate attorneys today by calling (717) 232-5000 or reaching out online.