Real Estate Law | Real estate contracts not subject to three-day cancellation rule
Dear Mr. Feichthaler:
I recently listed my home for sale and immediately received two high offers. I accepted one on Friday. Over the weekend, as I thought about this, I realized that I probably could have gotten more money if I waited for more offers. Plus, I do not have another house lined up to purchase, so I will need to live somewhere temporarily if this sale goes through in three weeks. Someone told me that sellers have a three-day right to cancel a real estate contract. Can I cancel today (Monday) since it has been only three days since I signed?
Sherry A.
Dear Sherry:
Home prices tend to shift suddenly, so it is possible that your asking price was a bit low. Hopefully your Realtor reviewed recent sales with you to determine a good asking price. So, I offer you congratulations on the strong offer, but the bad news is you may be stuck with it. I have had several clients ask about a three-day right of rescission. Although Florida does have a three-day cancellation law, it applies only to certain contracts – namely items that are sold through home solicitation. Real estate contracts do NOT have a three-day right of rescission. In fact, the standard real estate contract contains no way for a seller to exit the contract once signed, unless the buyer defaults and does not perform. From a legal perspective, you have to go through with the sale.
However, from a practical perspective, there are several ways you can potentially resolve this situation favorably. First, it never hurts to ask the buyer to cancel the contract. They could be having second thoughts, too! If that fails, you could offer them a dollar amount that would compensate them for their trouble. Although they are under no obligation to accept a payment for cancellation, many will, especially if your offer is substantial enough. Also, if it is simply a matter of needing more time before you move, you may offer a small discount on price in exchange for a longer closing date. Or, you could ask for a leaseback agreement, allowing you to stay in their home after closing. You could become a short-term renter after the sale. I recommend you put yourself in the shoes of the buyer, and consider what it will take to reach the result you are seeking.
Depending on the contract, it is likely there will be ramifications to you not fulfilling your obligations. Namely, the buyer could sue you for specific performance, essentially forcing you to sell on the terms of the contract. Even worse, your Realtor and the buyer’s Realtor may have an action against you for breach of contract. Many listing agreements provide the commission is payable in a situation where the parties mutually agree to cancel, since the Realtor did their job in finding you a buyer. So, before you make any offers to make payment for cancellation, make sure all parties are covered by any cancellation.
I advise all of my clients to carefully review offers to sell real estate to ensure all of their concerns are addressed in the contract. Where the contract does not provide certain protections, they can be added before signing. The purchase or sale of real estate will be the largest financial commitment many of us ever make. Care should be taken to avoid a large mistake.
Sincerely,
Eric Feichthaler, Esq.
Eric P. Feichthaler has lived in Cape Coral for over 38 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, and serves as President of the Cape Coral Kiwanis Foundation. He has been married to his wife, Mary, for 25 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and practices in real estate law, estate planning, and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.