All too often, buyers back out of a sale for one reason or another. The circumstances are immaterial to the seller, who is left with a potential loss. When a buyer pulls out, the pressing question is whether or not they had a signed contract with the seller.
Reneging on a Signed Contract
A contract is signed when the intent to buy has been acknowledged, and the property listing is pulled off the market. This means that as part of the trust put in the buyer, the seller will no longer entertain any other potential buyers. At this point, the buyer solidifies his or her intent by signing a contract. It also means that buyers are liable if they pull out of the sale. The contract itself includes the penalties and liabilities for breaking the contract.
The contract includes a date when payment is due. If there is no payment by the due date, this is a breach of contract. The seller can demand interest until it is paid. There is usually a grace period of 14 days for the buyer to pay, after which it is considered a material breach of contract. The seller can then terminate the contract. With the termination of the contract, the property can be put up for sale once again.
As per the contract, the seller can try to recover any losses that have accrued during the sale. This includes any difference between the amount stated in the contract and the eventual selling price. Any shortfall, including interest computed from the contracted date of sale up to the actual sale as well as the VAT, can be included in the calculation. Other expenses, including legal fees to redress the loss of sale, can also be included in the claim.