Within an executed contract, the seller has agreed to sell their home, with no way out of the contract. That's called Specific Performance, as they must perform their end. However, the buyer has a way out almost every time as you can just claim something about financing. Or if they default, the earnest money would revert to the seller. Buyer can always back out, seller cannot.
I'm in a situation right now where we're having appraisal issues, and the seller is wanting to terminate the contract so an appraisal is not stuck on their house, so they can still turn around and sell to another buyer willing to over pay for the house. We have had 4 appraisers look at the house, and the final appraisal we're accepting is from an appraiser that the listing agent picked!! It's not even a buyer's lender's choice, it's their own agent's choice, and it didn't appraise! Sales price was lowered to appraised value.
The problem there is that the appraiser is on the watch list for this lender since 2004, so now they want a field review. When there is a field review, the appraisal goes into the system so no matter what buyer is on the property in the immediate future, the underwriters will see that it was just appraised and the buyer will have to bring cash to closing. The sellers are trying to stop this by terminated the contract and not allowing my buyers their opportunity to obtain financing. The field review may turn out just fine, but the sellers are worried, and they should be... but that gives the sellers no right to terminate, as the loan has nothing to do with them at this point.
Why sellers try to sell a house for nothing of what it's worth is beyond me, but I'm so glad that in the initial offer, I knew it was high so I wrote in a contingency about appraisal. Yeah me!
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