In Arkansas, can a home seller sue the buyer, for damages incurred when they back out of a home purchase less than 3 days from closing?

UPDATED: Oct 1, 2022

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In Arkansas, can a home seller sue the buyer, for damages incurred when they back out of a home purchase less than 3 days from closing?

If sueing can be done, then what can the seller hope to recover? The seller lost a potential buyer, to accept a lesser cash offer. No earnest money provided. All inspection items covered by 5,000 additional reduction provided by seller, requested by buyer, signed by both parties stipulating any further repairs to be responsibility of buyer. All documents properly signed and 3 days prior to closing, the buyer requested termination papers with reason being–taxes too high, POA fees too high, insurance too high, and stated he didn’t realize these things and could no longer afford the purchase.
What recourse does seller have.??

Asked on August 27, 2018 under Real Estate Law, Arkansas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The seller can sue for breach of contract. Normally, when the buyer backs out with legal justification (which this buyer does not have: realizing that he cannot afford the property is not a legal defense to his contractual obligations), the seller keeps the deposit/earnest money as his "damages." When there is no deposit, the seller has to sue and can sue for losses, such as carrying costs for having to now "carry" the property for longer before selling it, and/or for expenses incurred in the course of the sale, which can sufficiently prove in court are the result of the buyer breaching the contract at the last minute.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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