Fraud Blocker
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:

  1. Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
  2. 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 …


When will En-Bloc set to Become Reality Beyond 2023?
All Opinion Selling Tips

When will En-Bloc set to Become Reality Beyond 2023?

TLDR The real estate market is experiencing a lull in en-bloc activities due to various factors. Higher Additional Buyer’s Stamp...
Read More
What Are The Key Factors That Contribute To Property Valuations And Why Are They So Crucial?
All Buying Tips

What Are The Key Factors That Contribute To Property Valuations And Why Are They So Crucial?

TLDR Understanding property valuations is crucial for both buyers and sellers in the real estate market. Property valuations involve two...
Read More
Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?
Mandarin Top 5

Top 5 Reasons : Why Do Singaporeans Still Flood The Property Market?

Singapore, a thriving city-state with a robust economy and a strong demand for real estate, has always been an attractive...
Read More
Rising Interest Rates : A Cause for Concern?
All Buying Tips

Rising Interest Rates : A Cause for Concern?

TLDR In 2021, the real estate market saw a surge in demand due to low interest rates and supply chain...
Read More
5 Reasons : Why Investing In Singapore’s Property Market Can Be A Good Retirement Plan
Mandarin Top 5

5 Reasons : Why Investing In Singapore’s Property Market Can Be A Good Retirement Plan

Investing in Singapore's property market can be a good retirement plan for several reasons. Here are five key factors that...
Read More
5 Factors : The Benefits Of Investing In A Property With Good Access To Green Spaces In Singapore
Mandarin Top 5

5 Factors : The Benefits Of Investing In A Property With Good Access To Green Spaces In Singapore

Real estate investment has always been considered a sound investment decision, as it offers long-term growth potential and a reliable...
Read More
Why Can’t We Buy Low, Sell High?
All Opinion

Why Can’t We Buy Low, Sell High?

Madam Tan voiced that approximately two years ago, when her apartment hit its minimum occupation period, she and her spouse...
Read More
Top 5 Vegetarian Restaurants in Singapore
Mandarin Top 5

Top 5 Vegetarian Restaurants in Singapore

Singapore, a melting pot of cultures and cuisines, offers a diverse range of dining options for food enthusiasts. For vegetarians,...
Read More
Exploring the Resale Condo Market? Here’s What to Watch Out For!
All Blog Posts Buying Tips

Exploring the Resale Condo Market? Here’s What to Watch Out For!

TLDR The impact of COVID-19 on Singapore's real estate market has been significant, leading to a surge in demand for...
Read More
5 Tips : How To Negotiate A Good Deal When Buying A Singapore Property
Mandarin Top 5

5 Tips : How To Negotiate A Good Deal When Buying A Singapore Property

When looking to buy a property in Singapore, it's essential to know how to negotiate a good deal. Here are...
Read More
Top 5 : What I Wish I Had Known about Property
Mandarin Top 5

Top 5 : What I Wish I Had Known about Property

The world of real estate is a complex and dynamic field, filled with opportunities and challenges. It's a realm where...
Read More
Freehold Properties vs Leasehold Properties: Which is Better?
All Blog Posts Buying Tips Opinion

Freehold Properties vs Leasehold Properties: Which is Better?

TLDR When it comes to property investments in Singapore, understanding the differences between leasehold and freehold properties is crucial. This...
Read More
Top 5 Places to Learn About Singapore’s History
Mandarin Top 5

Top 5 Places to Learn About Singapore’s History

Singapore, a thriving metropolis with a rich history and diverse cultural heritage, offers numerous opportunities for visitors and locals alike...
Read More
Why Can’t We Have More Housing Options For Singles?
All Opinion

Why Can’t We Have More Housing Options For Singles?

TLDR The blog post discusses the evolving regulations for single individuals to purchase public housing in Singapore. It highlights the...
Read More
Top 5 Historical Landmarks in Singapore
Mandarin Top 5

Top 5 Historical Landmarks in Singapore

Singapore, a bustling cosmopolitan city-state, is known for its rich history and diverse cultural heritage. This small yet vibrant nation...
Read More
5 Must-Know Questions Before Investing in Real Estate
All Blog Posts Buying Tips

5 Must-Know Questions Before Investing in Real Estate

TLDR When considering whether to buy a new development or a resale property, it can be challenging. In the blog...
Read More
Singapore’s Housing Phenomenon: A Success Tale Calling for Tweaks – Insights from the Experts
All Opinion

Singapore’s Housing Phenomenon: A Success Tale Calling for Tweaks – Insights from the Experts

TLDR Singapore's housing system has been praised for its effectiveness in meeting citizens' homeownership desires. The public housing program by...
Read More
Four Things to Avoid When Renting Out an HDB Flat
All

Four Things to Avoid When Renting Out an HDB Flat

TLDR Renting out an HDB flat in Singapore can be a lucrative source of secondary income. Key considerations include adhering...
Read More
The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices
All Buying Tips Opinion

The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices

TLDR When it comes to the real estate market in Singapore, understanding property valuations and the impact on mortgage loans...
Read More
Should You Keep Your Resale HDB Flat When Buying a Private Property? 5 Key Factors to Consider
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

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

Compare Listings