Your search results

What If Sellers Back Out of a Deal?

Posted by Jayson Ang on July 1, 2024

| 0

TLDR

When a seller unexpectedly withdraws from a property transaction before a contract is signed, they are legally allowed to do so. However, once an Option to Purchase (OTP) is issued and exercised, both parties are bound by a contract. If the seller backs out after this stage, legal action can be taken, and the buyer may be entitled to compensation. To protect against unreliable sellers, buyers should pay attention to seller responsiveness, read contracts carefully, keep records of communications, and understand their rights. Ultimately, deciding whether to buy, sell, or wait depends on individual circumstances. It’s recommended to seek advice and guidance to navigate the real estate market effectively.

From searching for your perfect home, negotiating prices, managing finances, and looking into different home loan options, you need to do your best to ensure a successful purchase.

But what if the seller unexpectedly withdraws?

Are they even allowed to do that?

And if so, is the buyer entitled to any form of compensation?

Until a contract has been made and accepted, neither the buyer nor seller are obligated to the other party.

At the start of the selling process, before any contracts have been signed, the seller still has the right to pull out of the transaction if they no longer wish to sell their property – even if the buyer has been viewing listings and setting up meetings to view the property in person.

Thus, if you’ve expressed interest verbally but haven’t yet been handed an Option to Purchase (OTP) or sales agreement, the seller is able to revoke their offer without consequence.

When Sellers Cannot Back Out of the Deal

After putting pen to paper on the OTP, things are now undeniably official.

Once the seller issues an OTP, and if you decide to exercise the OTP, you and the seller enter into a binding contract.

It’s essential to read the OTP details carefully to see if the seller is able to withdraw from the agreement once the OTP has been exercised; while typically the seller is not allowed to back out once the OTP has been exercised, buyers typically can withdraw but will forfeit any deposits or option fees they have paid.

When you exercise an OTP, you may be required to sign a sales agreement, making it binding for both you and the seller. Unfortunately, this contract leaves no room for backing out; if the seller fails to uphold their end, any option fees or deposits paid by you must be refunded.

You could consider taking legal action against the seller to make them stick to their obligations; however, unless they have not refunded your money or caused you to suffer huge losses, it might not be worth going through the hassle or expense.

How to Protect Yourself Against ‘Bad’ Sellers

Most of the time, sellers don’t back out of property transactions – but there are some simple steps you can take to avoid any potential troubles from a reluctant seller.

1. Find Out Why They Are Selling the Property

When you chat with the seller or the agent, observe if the seller appears determined to sell the property, or if it looks like they are somewhat undecided.

Asking the seller or agent why they are selling can help you spot an uncertain seller. If the seller is simply upgrading their home, that’s usually a sign they are eager to sell.

However, if it appears they are just trying to see what price they can get for their home without a pressing need to get rid of it, they might not go through with the transaction.

2. Pay Close Attention To The Seller’s Responsiveness And Adherence To Deadlines

If the seller fails to fulfill their commitments, isn’t punctual for viewings, or does not adhere to timelines, there is a chance they may not follow through as promised.

Pay close attention to how they answer your calls, respond to your requests for information, and if they issue the OTP or sales agreement when they said they would.

3. Read the OTP and Sales Agreement Carefully Before Signing

Before signing any documents, it’s critical to thoroughly read through all contracts, such as the OTP and sales agreement, which will outline your rights and obligations as well as those of the seller.

Be sure to double-check if there are any stipulations that allow the seller to back out of the deal or end the contract, and if that doesn’t sit well with you, then speak up and try to have them removed.

4. Keep a Copy of All Communications

It’s essential to keep all communication with the seller and agent – whether in person, via text, or email – in order to have a paper trail should you ever enter into a dispute.

Be sure to save a copy of all messages sent and received for your records. To ensure that verbal conversations are not forgotten or misconstrued, it’s best to write down and acknowledge the details of the agreement in a text or email afterwards.

This way, you’ll have solid evidence of any verbal agreements made with the seller.

5. Know Your Rights When Dealing with Sellers

To guard yourself from any possible disputes, it’s wise to take a few precautionary steps before signing any documents, such as reading all contracts thoroughly and saving a copy of all interactions with the seller and their agent.

Despite the fact that most sellers don’t end up obstructing their property transactions, it’s always prudent to be aware of your and the seller’s rights, as well as keep an eye out for a seller who may be untrustworthy.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Blog Posts Buying Tips

When Is The Best Time To Buy A New Launch?

Jayson Ang – January 13, 2023 –

TLDR When it comes to new property launches, timing is crucial. Early buyers often secure the best prices due to...

All Blog Posts Buying Tips

5 Risks Upgraders Should Be Aware of To Avoid Financial Troubles When Progressing Their Property

Jayson Ang – July 3, 2023 –

TLDR The article delves into the intricacies of property asset progression in Singapore's real estate market. It highlights the risks...

Mandarin Top 5

5 Insider Tips From Real Estate Experts On How To Get The Best Deal On Property In Singapore

Jayson Ang – March 16, 2024 –

Investing in property can be a great way to build wealth and secure your financial future. However, with Singapore's highly...

Mandarin Top 5

Top 5 Dessert Places in Singapore

Jayson Ang – July 2, 2024 –

Singapore, a melting pot of cultures and culinary delights, is known for its mouth-watering food scene. From hawker centers to...

Mandarin Top 5

5 Cons Of Buying A Resale Property

Jayson Ang – March 7, 2024 –

Luxury properties in Districts 9 and 10 of Singapore are highly coveted, and for good reason. From stunning views and...

All Buying Tips

Looking To Buy An Older HDB Flat? Here’s What You Need To Know Before You Sign On The Dotted Line!

Jayson Ang – March 27, 2024 –

TLDR When considering purchasing an older flat, ensure to thoroughly inspect wet areas for leaks, check balcony conditions, watch out...

All Blog Posts Buying Tips

Unlock The Key To Selling A Home With A Perceived Disadvantage Like Being West-Facing Or Close To A Rubbish Chute – Here’s How!

Jayson Ang – January 26, 2023 –

TLDR When selling your house, turn perceived disadvantages into advantages. For sun-facing homes, use UV sheets and blinds to manage...

All Blog Posts Buying Tips

Discover 11 Helpful Tips for Buying an Older Condo : A Comprehensive Guide for Buyers

Jayson Ang – March 2, 2023 –

TLDR When considering purchasing an older resale condo, ensure you investigate potential en-bloc bids, lift conditions, parking conveniences, playground safety,...

All Buying Tips Opinion Selling Tips

Discover the Optimal Timing to Invest in Singapore Real Estate: Unveiling Historical Insights

Jayson Ang – August 1, 2024 –

TLDR When considering the best time to buy or sell a property in Singapore, historical data analysis reveals key insights....

All Blog Posts Buying Tips

When Is the Right Time to Sell Your House?

Jayson Ang – December 31, 2022 –

TLDR When deciding to sell your house in Singapore's competitive real estate market, timing is crucial. Selling during a seller's...

All Opinion

Unseen Dangers of Putting Your Money in Upscale Freehold Properties in Singapore

Jayson Ang – February 17, 2024 –

TLDR Luxury freehold properties in Singapore may not always be the lucrative investment opportunities they appear to be. High-end properties...

All Buying Tips

Downpayment For Condo: How Much Do First-Timers Need In Singapore?

Jayson Ang – March 12, 2024 –

TLDR The blog post delves into the complexities of condo downpayments in Singapore in light of the impact of Covid-19...

All Buying Tips Selling Tips

Unpacking Property Ownership: Joint Tenancy vs. Tenancy-in-Common

Jayson Ang – September 10, 2024 –

TLDR When a property has multiple owners, the choice of ownership type is crucial to determine how shares are distributed...

All Buying Tips Opinion

Why Some New Condo Releases Outperform Others

Jayson Ang – July 9, 2024 –

TLDR When it comes to the real estate market, familiarity plays a crucial role in the success of larger condo...

All Blog Posts Opinion

Should Buying A Low Lease Project Be A Viable Option?

Jayson Ang – June 1, 2023 –

TLDR When considering low lease projects in Singapore, it's crucial to evaluate your individual needs, financial standing, and future plans....

All Blog Posts Buying Tips Opinion Selling Tips

Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider

Jayson Ang – November 3, 2024 –

TLDR In Singapore, owning both an HDB flat and a private property has become complicated due to factors like Additional...

Mandarin Top 5

5 Reasons Why It’s A Great Time To Buy Property In Singapore In 2024

Jayson Ang – February 24, 2024 –

Singapore's property market is known for its stability, high demand and strong returns. With a growing population, low unemployment rates,...

Mandarin Top 5

5 Points : Singapore’s Property Market vs. Stock Market: Which is the Better Investment Option?

Jayson Ang – April 2, 2024 –

Investing is an important aspect of personal finance and can be a valuable way to grow wealth over time. However,...

All Blog Posts Buying Tips Top List

Expert Tips : Top Property Investment Strategies in Singapore

Jayson Ang – December 25, 2022 –

TLDR Singapore offers lucrative property investment opportunities with its stable economy and political climate. To succeed, investors should conduct thorough...