When can a seller back out of a real estate contract in NYC?

[aslan]

Hey guys, I'm familiar with situations where the buyer can back out of a contract, say if certain contingencies such as the mortgage contingency are activated. But what about sellers backing out of a contract before closing?

I'm sure there's other language in the purchase contract that will allow a seller to back out of a fully executed purchase contract?

Also, what is the buyer fails to get a commitment letter in time but decides to waive the mortgage contingency. Can the seller back out of the contract at this point even though the buyer wishes to proceed without the mortgage contingency?

Just trying to figure out ways a seller could back out of a contract if they have a change of heart.

[ryan_gz]

I recently spoke to my attorney about this very topic. If the buyer fails to get a mortgage commitment letter within the timeline of their financing contingency, they have the right to walk away from the deal. You're asking whether the seller is bound to do the deal if the buyer wants to do the deal anyway even though they failed to get a commitment letter within the timeframe. Fortunately for sellers, there is language in most financing contingencies that allow the seller to also walk away in this situation!

I would be curious to hear about other situations as well where a seller can back out of a purchase a sale contract that has been fully executed. Most of the literature seems to focus on how a buyer can get out of a contract.

[lower_nyc]

I recently spoke to my attorney about this very topic. If the buyer fails to get a mortgage commitment letter within the timeline of their financing contingency, they have the right to walk away from the deal. You're asking whether the seller is bound to do the deal if the buyer wants to do the deal anyway even though they failed to get a commitment letter within the timeframe. Fortunately for sellers, there is language in most financing contingencies that allow the seller to also walk away in this situation!

I would be curious to hear about other situations as well where a seller can back out of a purchase a sale contract that has been fully executed. Most of the literature seems to focus on how a buyer can get out of a contract.

Contingencies aside, the only way for a seller to back out of a fully-executed contract would be if the buyer also agreed to terminate the contract. This is why it's important to work with brokers and lawyers who are both highly competent and socially affable. The lawyers and brokers are the ones who make these super difficult calls and try to negotiate in these unusual circumstances. If your attorney or broker is rude or simply socially awkward, you have no chance of being able to back out of the deal if you are fully in-contract.