Legal Question in Real Estate Law in California
How does one go about collecting damages when a buyer backs out of a home sale?
3 Answers from Attorneys
One doesn't generally succeed in doing so, other than maybe a small portion of the escrow deposit to cover costs incurred. Agree to cancel escrow so you can re-list the property. .
In most cases, where the standard form contracts are used, even if the buyer had no right to cancel (there are many reasons a buyer legally can cancel the contract), the seller is limited to the deposit. If that has already been put into escrow, the buyer is obligated to release it to the seller if the buyer has wrongfully cancelled. If the buyer refuses to release it to the seller, the seller has to go to court, or arbitration if the parties agreed to the arbitration clauses in the standard contract.