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You Can’t Just Back Out on a Purchase Contract

Purchase Contract graphic featuring a contract being signed

A number of months ago we had a buyer of a model home we were selling back out of the contract and refuse to close.  She had beat out two other buyers for the same home, but when the time came to close, she was a no show claiming that we hadn’t cured alleged defects.

As the inspection contingency deadline approached, the buyer (through her attorney) started acting squirrelly, providing a long list of alleged defects that in fact were not defects.  Many were either nit-picky cleanliness issues, or minor normal wear and tear, or appearance preferences, and only a few were actual ‘defects’.

The buyer inspected the curing of the defects a day before the deadline, including inspecting  the non-defects that we decided to address anyway – out of our own generosity.  After curing, the buyer then claimed that we had not fixed the defects and falsely claimed the right to not close even though the deadline was still a day away.

It became clear that the buyer was just looking for any excuse to get out of the contract and not buy the house; reasons undisclosed.  I think that generally too many buyers do not realize is that a contract is binding; that they can’t just bail out at a whim; that they can’t just change their mind; and that falsely using an inspection contingency as a false excuse (even when a defect is cured) is not a valid or legal reason for not closing.  She even cancelled the appraisal prior to the inspection, which meant she had not made an effort to secure financing, again, wrongly using and abusing a contingency in the contract, the financing contingency, as an excuse to bail out (and frankly, making clear her true false intentions to not close).

When you make a written offer for home, you are legally bound to close unless there is a real and valid reason in the contract not to.  A buyer cannot just make up any old excuse or simply ignore the agreement to close.  Buyers don’t seem to realize that they cannot use contingencies in the contract to bail out for alternative (hidden) reasons.  For example, not being able to secure financing is one thing; deliberately sabotaging the financing by cancelling the appraisal is another.  If you don’t make a concerted effort to secure financing, then you have violated the agreement.  Likewise, claiming a defect that is cured or that does not inhibit your ability to use or enjoy the house is also a false reason for not closing.


Not closing on a house for a false reason can make you liable under the contract.  Next blog – Specific Performance and what sellers can do to enforce the contract.

Terrence R. Wall, Housing Developer

Former university lecturer and teacher of Real Estate Development

And creator of the first university level course in Sustainable Development

M.S. in Real Estate Appraisal and Investment Analysis from the

Graaskamp Real Estate Department, UW-Madison

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