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Breach of Contract Real Estate Agent

In many cases, sellers are anxious to close on their properties and get on with their lives. Occasionally, however, someone will try back down from a seller’s contract, maybe because they have cold feet, received a better offer, or went through a life-changing experience that will make selling questionable. As the buyer’s real estate agent, your client expects you to explain to them how to handle this difficult situation. Here is what you’ll need to understand.

Did They Actually Default?

Prior to you starting to look for remedies for a failed deal, you need to be sure the seller actually defaulted. A lot of contracts contain some legal way out of an agreement without any consequences. Commonly called contingencies, these provisions stop a buyer from suing for breach of contract. For instance, if both parties agreed the sale was dependent on the seller locating a new home to buy in the contract. If the seller has made an honest attempt but hasn’t been able to find a home, they’re completely within their rights to cancel the contract. In this example, you and the buyer would not have legal grounds to object or sue. This is only one reason why it’s so vital to carefully and completely read a seller’s contract prior to you agreeing to sign.

When You Can Sue

When a seller is really breaching a contract and you can establish you’ve been damaged financially, you can sue. Nevertheless, the amount you can sue for depends on your state’s laws. If the seller can demonstrate they acted in good faith and you can’t establish you were financially impacted, you might only be entitled to your money deposit, together with interest and practical expenses, like the cost of a survey, title assessment, and attorney’s fees.

Having said that, if you can prove the seller behaved in bad faith, your state might allow you to pursue additional damages. Since laws can differ by location, it’s usually best to speak with a real estate attorney to understand your rights and choices available to you.

What if There Isn’t a Contract?

If there’s no seller’s contract, or the contract comes out to be unenforceable or unreasonable, you are probably within your rights to put an end to the agreement and fully recover any payments that you made to the seller. When both the buyer and seller consent to terminate the agreement, the buyer is usually permitted to recover all purchase dues paid, even when the contract says these will be given up if the contract isn’t performed. Once more, you should speak with a real estate attorney for confirmation.

Demanding Specific Performance

When a seller is can but declines to “perform” – denoting transfer of the house to your client – you may call for legal action for “specific performance.” This just means requesting a court order that forces the seller to sell the property as intended. More specifically, the order forces the seller to sell the house in accordance with the terms of the contract, rather than just compensate you monetarily for the contract breach.

It’s essential to not forget that specific performance is up to the court’s judgment and only considered suitable when the purchase agreement points out basic elements of the sale in clear and concise terms. To pursue specific performance, buyers need to also be willing and able to complete their part of the deal.

When the contract enables the seller absolute rights to cancel, specific performance is most likely out of the question. Courts are usually reluctant to enforce specific performance, especially if the seller plans to remain living in the home. At the same time, if the seller breached on account of a better offer, a court is more justifiable to make a homeowner sell in accordance with the terms in the original contract.


  1. What to Do When a Seller Breaches a Real Estate Contract: 2-10 Blog: 2-10 HBW.” 2, 3 Jan. 2020, www.2-10.com/blog/what-to-do-when-seller-breaches-real-estate-contract/.

Real Estate Expert Witness Services by Craig Cherney, Esq.

Craig Cherney is a trusted client advisor and a sought after real estate expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters.  Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate480-399-2342.

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