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?
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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
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 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.
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