What recourse does a seller have when a buyer allows their contingent sale to flub.

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What recourse does a seller have when a buyer allows their contingent sale to flub.

Seller accepted an offer contingent on the sale of the buyers’ home. Buyer
accepted an offer from an investor. The buyer’s home appraised at the sale price
and Seller was informed that all contingencies were satisfied. 24 hours before
closing buyer informs seller that the investor is backing out because an
appraisal of their after improvement value was not high enough. So Buyer can’t
close on Seller’s home. Seller incurs thousands in costs based on Buyer’s
representation.

Should the Seller have had any protections that the Realtor should have employed?

Does the Seller have any recourse?

Asked on September 5, 2019 under Real Estate Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

If buyer was still within the contingency period, then they can pull out of the sale without penalty, since they may do so within that period. But if they are outside that period--as they most likely were, if this was the day before closing--they can no longer use the contingency. If they refuse or fail to close, the seller can at a minimum keep the deposit or earnest money; and if the seller can prove that they incurred costs or losses that exceed the amount of the deposit, the seller could sue for the balance of those costs or losses, so long as there contract of sale did not have some provision or term limiting the seller's recovery to the deposit.


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