The biggest purchase in your life will most likely be buying a home. Buying a home can be very stressful, will you get finance, will you find the right property at the right time, will you be able to obtain a large enough deposit to satisfy your lenders. There are also plenty of moments during the sale of a home where something can go awry. We all dread the thought of having an offer accepted on our dream home, only for the seller to change their mind and leave you in with nothing. Unfortunately, these scenarios are not uncommon, but more often than not, there’s a contractual clause that is intended to protect both buyers and sellers from situations where one party backs out of a sale. It’s sometimes easy to understand why a potential buyer may decide to back out of a deal, and that’s more commonly what happens. Maybe a home inspection comes back with unfavorable results, or there’s a contingency in the contract that can’t be fulfilled by the seller. However, buyers often have more to lose, and more chance of huge disappointment, in the case where a sale falls through unexpectedly on the seller’s end. It can be devastating to put in an offer and think you’ve landed the deal, only for the seller to dash all your hopes and back out of the home purchase agreement. So, often buyers wonder, can a seller back out of an accepted offer on the house?
The seller’s signature seals an unconditional contract, therefore if a buyer has already made an unconditional offer and wants to back out, the only way to do so is if the vendor hasn’t signed a document yet by withdrawing an offer or by cooling off if the buyer is still inside the cooling-off period (if applicable). In general, there are numerous dangers to the sale process associated with unconditional contracts. A pre-purchase contract review is a perfect way to learn more about the property you are looking to purchase and find out what is or is not possible with the property should you be successful. If the vendor signs the unconditional contract, they are lawfully bound to sell that property to the purchasing party of the unconditional contract.
The governing Contract of Sale will specify the rights and remedies available to a purchaser (or buyer) in the event that a Vendor (or seller) fail to complete settlement. In Victoria, such rights are covered by General Condition 35 (and any special conditions that may be agreed upon by the parties).
In majority of cases, it is the buyer who will default on a term of the contract of sale (usually settlement) and in such circumstances, after the appropriate default notice is provided by the seller and not remedied by the buyer, the contract can in turn come to an end. The seller can retain the deposit, can seek additional legal costs/interest be paid, whilst even pursuing litigation to recover damages (loss and costs arising from the failed sale and re-sale) or possibly specific performance (an order specifying what a party must do such as completion of the contract).
A buyer too, has remedies available where a vendor breaches the contract. They can seek to issue a default notice which again, if not remedied by the vendor, can in turn permit a rescission of the contract. They too, are required to receive any money paid under the contract in return. They may also be paid any interest and reasonable costs payable under the contract, with such to be charged on the land until payment is made. The buyer may also recover any loss otherwise recoverable. To do so, they may be required to commence litigation to attempt to recover damages (losses and costs incurred) or possibly specific performance (an order specifying what a party must do such as completion of the contract).
Regardless of whether you are planning to buy or sell a property, Select Legal is ready to assist with the process, including accessing contracts, whether they be conditional or unconditional.
Our knowledge of the process and attentive service (as shown in our Google Review history) is what sets us apart from others in this field. Depending on the needs you have, Select Legal’s expert legal advice is ideally qualified to handle your needs through all the required legal checkmarks.
Contact Select Legal today for all your property needs or conveyancing related needs or request a quote which will only a few minutes.
