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What to do when a buyer voids a contract?

What to do when a buyer voids a contract?

Hi!

It’s not an exciting day when the buyer changes his or her mind. It’s definitely part of the risk of selling a home and getting under contract that a buyer may decide for any reason to want out of a contract. As a seller working with a skilled listing agent, one can do a lot prior to going on the market, while accepting contracts and during the contract to close phase to help avoid a buyer backing out of a contract.

Save money. Have a strategy.

Save money. Have a strategy.

Even so, sometimes buyers do. This could be for a reason they find in a home inspection, for an unexpected health or family reason, loss of a job or any number of reasons. They might state their reason and ask out or they might void the contract during the home contingency phase, for example (As a side note, this is one reason to have a strategy to eliminate contingencies being in the contract in the first place. Like doing your own pre-listing inspection and making corrections, and then advising the buyer that this has been done.).

When the buyer wants out, and can do so contracturally, or you as a seller simply agree to let them out of the contract, what then?
Some options:
1) Put your home back on the market immediately with no changes whatsoever to the home or listing information available to the agents and the public.
2) Put your home back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the information.
3) Put back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the home itself and the information.

My experience is the 3rd option is usually the best approach.

First, without exception, it is always important to assess where the market has changed since the home went on the market and since the contract was ratified. Markets are always moving in one direction or the other, and can be very local (I refer to it as hyper-local.), very specific to the neighborhood, even. Take a strong look at “What is the market of the moment?” In order to be in sync, timely, with decision makings in formulating a strategy.

Selling Your Home Without Having It Returned to You

Selling Your Home Without Having It Returned to You

Then, if due to a home inspection, what was the reason for the back out? Did the buyers say they were anxious or unhappy about any items on it? If so, it would it behoove you as a seller to listen to what the buyers found and said about it, make corrections if it makes sense, and note any big ticket items as “replaced, new or improved” to buyers?

Another reason the buyer might back out is for a more desirable home down the street that has come on the market since the buyer went under contract with you. If so, would it be a great idea to take a very strong look at that home and how it compares to yours? What about it is more likable to buyers – price, condition, exact location? You may want to or need to adjust your pricing strategy if that home or any others help you to see the market of the moment in a clearer sense.

I hope this was helpful. With a great strategy going into selling a home – choosing an experienced, skilled listing agent, completely preparing your home for sale, having a smart pricing strategy, and creatively and strongly marketing your property, you will be a long way to a hedge against a buyer wanting to void a contract. An once of prevention…. “an investment of $100 could save you $1,000.”

Cheers,
Ken

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