Salt Lake City, UT asked in Real Estate Law for Utah

Q: What happens if signed a purchase agreement of my house for buyer to buy it and backed out before closing?

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1 Lawyer Answer
Kenneth Prigmore
Kenneth Prigmore
  • Spanish Fork, UT
  • Licensed in Utah

A: It is not clear by your question which party backed out. The Buyer or the Seller? Earnest money is normally required by a buyer in case they back out. If the requirements under the contract have been met, the Buyer will lose the earnest money.

If the seller backs out, and they don't have a reason allowed under the contract, the buyer can sue. Sometimes this will result in the buyer winning money to compensate for their loss. A loss might happen if you contracted to sell for $100k but by closing time, the home's value had increased by $10k. A buyer could sue for the $10k or they could sue for the court to force you to sell them the house at the price agreed.

It's rare that either party will sue. And once lawyers are involved, it's rare that a loophole cannot be found to avoid the lawsuit. When a lawsuit happens, it is common for the parties to negotiate some sort of fix. Perhaps the Buyer would be willing to pay a little more than previously agreed, but not as much as the new full value.

Your specific circumstances will control what happens in your case. I recommend talking to an attorney and telling them all of the facts and letting them read your agreement.

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