Walking Away From a DFW Real Estate Closing

Buyers walking away from DFW home closing happens more often in buyers markets. This is because in buyer's markets, when prices are soft, some buyers get scared when they should be excited. Many of them are afraid of further declining home values in the market.  Generally, the fear begins to creep in right after the purchase offer is accepted and then it begins to build. By the time full blown panic sets in, it's usually a day or two before closing.

Home Sellers Who Walk Away From Closing

It's rare that a or seller walks away from closing. In most cases if sellers are going to get sellers remorse it will typically happen upon offer presentation, when the reality of actually selling sets in.  Although, I know of a seller who bought another home and shortly thereafter changed her mind. He had moved out of his existing home and into his new home before his first home closed. Within a couple of days of settling into his new place, he decided to terminate the sale of his first home and move back home. Of course, by then she ended up owning two homes.

Home Buyers Who Walk Away From Closing

Well written purchase offers typically contain one or more contract contingencies that must be removed within a certain period of time. The time to walk away from closing or cancel a contract for most home buyers is in this contingency period. Buyers who walk away at the last minute often do so for one or more of the below reasons.  When a buyer walks away some of these sellers will utilize the services of a company to get their house sold.

·         Mortgage Financing.
Even though mortgage lenders may have issued a pre-approval letter, it doesn't mean the lender will actually give the buyers a mortgage. After the loan contingencies are removed, buyers may face underwriter stipulations that they cannot perform or overcome. An experienced loan officer can foresee many conditions for loan approval and fix them in advance, but alas, some loan officers are inept.

·         They Get Cold feet.
Sometimes, buyers who feel remorseful toward the end of the transaction probably should not buy the home because the pressures of homeownership may be to great for them to handle. These types of buyers might be better off renting a home.

·         They Found another home.
The grass seems to always be greener on the other side. Once a buyer has committed to buying a home, he or she may keep looking at other homes and before you know it, another home turns into that dream home. Which means goodbye to the first dream home and hello to the second one.

·         Change in Their Lifestyle.
Unexpected job transfers, a sudden pay cut, divorce.  Any of these circumstances can cause buyers to change their minds about closing the purchase. Sometimes medical emergencies can also cause buyers to cancel the transaction.

·         Natural Disasters.
Mother Nature is unpredictable. The house itself could be destroyed in a tornado, hurricane, earthquake or flood; any number of natural disasters can cause havoc, rendering a home inhabitable. Even a hard rain storm could cause trees to uproot themselves and crash into a home.  Most buyers under these types of circumstances simply would walk away. But they will also walk away if their repair request are not completed or something else goes wrong with the house, which they might uncover during their final walk through inspection.

After Walking Away From Closing - Repercussions

Unfortunately, once buyers have are past their contingencies in the contract, their earnest money is at risk. Many contracts call for liquidated damages in the event of a default. Without a liquidated damages clause, a seller may be free to sue for actual damages, which could exceed the deposit. Earnest money deposits are negotiable. It is not that unusual for a seller to accept $2,500 as a deposit on a $450,000 home, however, the higher the deposit, the more money the buyer has at risk under a liquidated damages clause. Buyers who don't care about closing and want to walk away will often forfeit their earnest money deposit. If it's only a $2,500, in the overall scheme of things, that amount may not be substantial enough to a buyer to force the buyer to follow through and close. If both parties have previously agreed to liquidated damages, the money the seller receives for the buyer's default could be limited to the actual deposit on hand. For more advice, please consult a competent real estate attorney.