This answer is written by AI. The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. Do not rely solely on the information provided in this response for any legal decisions. Consult with a qualified legal professional before making any decisions.

What Should I Do If a Seller Threatens to Sue After I Withdraw from a House Purchase?

Question from Daisy, What Should I Do If a Seller Threatens to Sue After I Withdraw from a House Purchase?

Answer from AI:

When you find yourself in a situation where you’ve withdrawn from a house purchase due to undisclosed repairs and the seller threatens to sue, it’s crucial to understand your rights and the potential steps you can take. Real estate transactions are governed by complex laws and contracts, so it’s important to approach this situation with caution and informed guidance.

Understanding Your Contract

First and foremost, review the purchase agreement you signed. Most real estate contracts include contingencies that allow the buyer to withdraw under certain conditions, such as:

  1. Inspection contingencies that permit withdrawal if significant defects are discovered.
  2. Financing contingencies if the buyer is unable to secure a mortgage.
  3. Appraisal contingencies if the property’s appraised value is less than the purchase price.

It’s crucial to determine whether the issues you’ve discovered fall under the contract’s contingencies. If so, you may have a contractual right to withdraw without penalty.

Escrow and Earnest Money

Earnest money is a deposit made to demonstrate the buyer’s good faith. The terms for forfeiting or retaining this deposit should be outlined in your contract. If you’ve already given up your earnest money to the seller, this may be considered your financial penalty for withdrawing. However, the seller’s ability to pursue additional damages depends on the contract terms and state laws.

Legal Steps and Considerations

If the seller is threatening to sue, consider the following steps:

  1. Seek Legal Advice: Consult with a real estate attorney who can provide guidance based on your specific situation and Maryland law. An attorney can review your contract, advise on your legal standing, and represent you if the matter goes to court.
  2. Mediation: Some contracts require mediation before litigation. Mediation involves a neutral third party who helps both sides reach an agreement. It can be a less costly and quicker alternative to court.
  3. Prepare Documentation: Gather all relevant documents, including the purchase agreement, inspection reports, correspondence with the seller, and any other evidence that supports your decision to withdraw.

Understanding Seller’s Damages

The seller claiming they will wait to sell the house to estimate their loss suggests they are considering suing for damages. In real estate, damages could include costs related to the delay in selling the property, any difference in the sale price, and legal fees. However, the seller must mitigate their damages, meaning they should attempt to sell the property for a reasonable price in a reasonable timeframe.

Next Steps

  • Do not ignore any legal notices or lawsuits filed by the seller. Failing to respond can result in a default judgment against you.
  • Keep communication with the seller or their agent in writing to maintain a record of all interactions.
  • Consider if there’s room for negotiation. Sometimes, a settlement can be reached that is less costly and stressful for both parties.


Navigating a dispute after withdrawing from a house purchase can be complex. While this guide provides a general overview, individual circumstances can significantly impact your legal position. It’s highly recommended to consult with a Maryland State Bar Association’s lawyer referral service for personalized advice. Additionally, familiarizing yourself with Maryland’s Real Estate Commission laws and regulations can provide further insight into your rights and obligations.

Remember, legal issues are often time-sensitive, so taking prompt action is crucial to protecting your interests.

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