seller wants to back out the deal

Can a seller back out after accepting an offer? It’s inevitable. If you’re a real estate wholesaler, then you’re certainly going to experience when the seller wants to back out of the deal.  It’s very frustrating, especially if you’ve already assigned the contract to your new buyer.

Maybe you’ve found yourself with one of these sellers, and left wondering what to do now.  I mean, they’ve signed a contract. They should have to perform, right?  The truth is, you can’t drag a seller to closing and hold their arm while they sign.

Most contracts specify the remedy for non-performance by both parties. Typically, a buyer must sue the seller for specific performance. This is a costly and time-consuming process.  Most of the time, it’s not worth it. As a professional, you must take each seller case-by-case and do what you feel is the best, both ethically and professionally. You’ll certainly find yourself in situations where you will both agree that its acceptable to just call the whole thing off.

Top 4 Reasons why sellers want to back out

There are various reasons why a seller may want to back out of a contract once it has been signed. Let’s have a look at some of the most common reasons:

The Affidavit and Memorandum

There’s a way to secure your interest in the property once you have a signed contract with the seller of a property. Technically once the contract is signed, both parties are contractually obligated to perform on the deal. If you run into a situation where the seller wants to back out of the contract, then you have the option of filing an affidavit and memorandum with your local courthouse.

Watch the video below for more information on how an Affidavit and Memorandum work.

So can a seller back out after accepting an offer? Well the answer is both yes and no. Yes, of course, they have the option to. Does that mean that they won’t have to pay a fee for doing that? NO. Eventually, you’ll be compensated for the lost revenue.

For more tips and foundational training on how to wholesale houses, check out the Bad Ass Real Estate Wholesaling Virtual Coaching Program. This will teach you all of the fundamentals that are required to be a successful real estate wholesaler.

4 thoughts on “What to do if the seller wants to back out of the deal?”

  1. Once I did not plan to buy this seller’s property. I was actually selling my own property and thought this property would go on the market before mine. The seller had used unskilled labor and it was hard for me to determine how to repair the improper installations. It took me a few weeks to find a decent contractor. I kept the seller abreast and they appeared to be fine but maybe a little frustrated as I was in regards to the time it took for me to find a legitimate contractor..When I found out another investor was involved for a higher price the seller lied. He was now in two contracts and I found out he was a real estate broker no less. Fortunately, I knew the other wholesaler. Since my contract was earlier she agreed to give me til the end of the week I closed by the end of the week. That wholesaler was honorable.

    On the next two happened within two weeks of each other. Both seller’s had tenants so a quick close was not possible.Both seller’s were under contract with me at the same time that they contracted with a 2nd seller. The 1st I met the end buyer who when we realized each other she said she would not pursue. She lied and pursued. I had already filed the affidavit since i felt the seller was waning.

    On the 2nd, I had to wait a over 1 month and 1 week before tenants were removed. I wanted to close within 30 days but it was not possible. Seller had liens and tenants so getting title clear and tenants out took time. The seller appeared to start wavering. I filed the affidavit. 2nd buyer’s contract had been signed as i had suspected. This wholesaler knew there was a contract with this seller. I was able to get seller back with a higher sales price. 2nd buyer threatened. We closed. Saved.

    The 3rd time, I had not been under contract with this seller for a month. Tenant needed to move. Squirrelly seller. I was scheduled to close in less than 1 week. I saw an advertisement on FB from another investor. I filed the affidavit then called the wholesaler feeling that they did not know about 1st contract. I knew this wholesaler. I asked for professional courtesy to back away from seller. He said he would. He did not ask for contract or any other information. I sent him and his partner the affidavit anyway. His partner kept marketing the property on FB. I asked them to stop marketing it.He stated it must be an old fb marketing instead of removing any marketing. He did nothing. It came time to close. Seller would not send closing documents to closing attorney. The 2nd wholesaler closed over my affidavit of memorandum.He also waited one more month before he closed. He lied on FB saying he asked for the contract that I did not send to him and said I didn’t have the price right and extended the closing date all of which were untrue. I did not want to engage on a online FB argument. They only way I could have salvaged this was to sue the seller for performance. The affidavit did not hold water.

  2. It would be nice to have video transcript on these so I don’t have to spend 12 minutes watching something i can read quickly.

  3. Troy Darnell Sarsirresteo Williams

    I use a Memorandum of contract on all my wholesale deals when i flip my assigned contract. I will still get paid…!!!!!!$$$ I feel more comfortable when i do a memorandum of contract……….!!!!!!!!!!

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