Can a home seller sue the buyer for damages incurred if they back out of a home purchase less than 3 days from closing?
Question Details: If suing can be done, then what can the seller hope to recover? The seller lost a potential buyer, to accept a lesser cash offer. No earnest money provided. All inspection items covered by $5,000 additional reduction provided by seller, requested by buyer, signed by both parties stipulating any further repairs to be responsibility of buyer. All documents properly signed and 3 days prior to closing, the buyer requested termination papers with reason being that the taxes, HOA fees and insurance were too high and he didn't realize these things and could no longer afford the purchase. What recourse does the seller have?
The seller can sue for breach of contract. Normally, when the buyer backs out with legal justification (which this buyer does not have: realizing that he cannot afford the property is not a legal defense to his contractual obligations), the seller keeps the deposit/earnest money as his "damages." When there is no deposit, the seller has to sue and can sue for losses, such as carrying costs for having to now "carry" the property for longer before selling it, and/or for expenses incurred in the course of the sale, which can sufficiently prove in court are the result of the buyer breaching the contract at the last minute.