How Can a Seller Get Out of a Real Estate Contract?

The short answer as to whether you can get out of a real estate contract if you're the seller is "yes." Ultimately, you don't have to sell the house if you absolutely don't want to. Be aware, however, that if you break a legal and binding real estate sales contract, you may have to compensate the buyers, especially if they sue you.


Specific Performance

By signing the real estate sales contract, you and the buyers agree that on the closing date, you'll sign over the title to the house and hand over the keys. In return, they'll pay you the agreed amount for the house, assuming all other contract conditions are met. The buyers have to do everything they say they're going to do in the contract -- such as get final loan approval in a timely manner, for example -- and you have to do everything you say you're going to do -- such as provide homeowner association documents if the home is in an HOA. You can flat-out walk away from a real estate contract, but the buyer might file a lawsuit for specific performance against you, meaning you didn't do specifically what you agreed to do in the sales contract.


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The Savvy Way Out -- Contingencies

Real sales contract forms have contingencies built in. This represents things that have to happen for the contract to remain legal and binding until closing. You and the buyer can write additional contingencies into the contract. Typical contingencies include, but are not limited to:


  • Buyers' loan approval
  • Satisfactory home inspection
  • Review of HOA documents
  • Seller closing on a new home
  • Buyers selling their old home
  • Appraisal -- applicable to certain types of financing

If the buyers don't fulfill one of their contingencies, and you don't offer to renegotiate the contingency, you can get out of the contract. For example, say the buyer's loan approval falls through by the drop-dead date specified in the contract. Sure you can offer the give the buyer time to find another lender or loan product, but you don't have to. The fact that they didn't live up to their end of the deal means you can refuse to sell them the house.


The same goes for the home inspection. You can refuse to make any repairs the buyers ask for and offer no closing cost credit as a compromise. If that's a deal breaker for the buyer, the sales contract can be voided.


In a hot seller's market with low housing inventory, being stubborn might not get the buyers to walk away from the sales contract. They might be willing to go through with the sale even if you refuse to make any compromises.

The Soft Landing -- Diplomacy

Communicate with the buyers through their real estate agent or attorney. Be honest about the reasons you just aren't ready to sell the house. Understanding buyers might simply ask for their deposit back and might not seek compensation for the time they spent working on closing the sale.



Legally, it's not enough to verbally agree to kill a real estate sales contract. Confirm that your real estate agent or attorney has delivered a contract release form -- called by various names among the states -- in person or by fax, should the buyers agree to let you break the sales contract.

Should You Get Sued

Consider hiring an experienced real estate lawyer to help you navigate the complexities of a specific performance lawsuit. If the buyers were poised to move into your house before you backed out of the contract, depending on the outcome of the lawsuit, you may have to financially compensate them for expenses related to finding a replacement home. Your real estate agent's broker -- and the buyer agent's broker -- also might sue you for commission, since you mostly likely will have agreed to pay the agents for bringing you a ready and willing buyer in the listing agreement, the real estate sales contract or both.