Doesn’t the buyer have to give a reason for backing out?
05/06/2014 | Author: Legal Staff
I accepted an offer on my home, and now the buyers are backing out. I thought they had to a give a valid reason—like that they can’t get a loan—but their agent says they don’t. Is that true?
It depends. If the buyers paid you for a termination option (see Paragraph 23 of the contract), they can cancel the deal for any reason within the agreed-upon time period. In that case, the buyers don’t owe you an explanation. You get to keep the option fee negotiated in Paragraph 23, but the earnest money will be refunded to the buyer.
If the contract does not include a termination option—or if the option period has expired—the buyers would be in breach of the contract if they tried to walk away without giving a contractually acceptable reason, such as not being able to obtain financing under the terms specified in the contract.
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