When it comes to the process of selling a house, the exchange of contracts is a crucial moment. It marks the point where both the buyer and seller become legally bound to the transaction and signifies that the deal will go ahead as planned. However, in some circumstances, a seller may feel that they want to pull out of the sale even after contracts have been exchanged. So, is this possible?
The short answer is yes, a house seller can technically pull out after the exchange of contracts, but it will likely come at a cost. Once contracts are exchanged, both the buyer and seller are legally bound to the transaction. This means that if either party pulls out without a valid reason, they could face severe financial consequences.
If a seller pulls out of a sale after exchange of contracts, they will be in breach of the contract. The buyer has the legal right to sue the seller for breach of contract, which could result in significant financial penalties. The seller may be required to pay the deposit back to the buyer, and any other expenses incurred by the buyer due to the seller’s breach of contract.
In some cases, there may be valid reasons for a seller to pull out of a sale. For example, if a major issue is discovered during a survey that significantly affects the value of the property, the seller may have reason to renegotiate the price or pull out of the sale. In these cases, it is important that the seller communicates the reason for their decision as soon as possible and follows the correct legal procedures to ensure that they are not in breach of the contract.
It is important to note that if a seller pulls out of a sale after exchange of contracts without a valid reason, they could face serious professional repercussions. For example, if they are a property developer or estate agent, their reputation could be significantly damaged.
In conclusion, a house seller can technically pull out after exchange of contracts, but they do so at their own risk. The consequences of breaching the contract can be severe, including financial penalties and damage to their reputation. If a seller is considering pulling out of a sale, they should seek legal advice before making any decisions to ensure that they are aware of the potential consequences.