Question:
“It seems like the buyer has all the rights to get out of a contract. Can the seller back out if he gets a better offer or for some other reason?”
Answer:
Here’s the idea:
The buyer is coming into many unknowns when buying a home, including:
- The physical condition of the home
- Whether a bank will loan them the money to buy that home
- Neighborhood issues (crime, noise, traffic, etc.)
- Etc.
So it makes sense for the buyer to have a reasonable “contingency” period to investigate these issues before being obligated to close the purchase.
On the other hand, the seller has few unknowns other than the buyer’s ability to qualify for a loan. So the contract gives the seller a contingency period for this.
(Warning: this clause is poorly and weakly written in the standard California contract. When representing a seller I rewrite the clause so the seller can be reasonably sure the buyer is qualified.)
Regarding specifically whether the seller can back out if he gets a better offer, the answer is no. The whole idea of a contract is to reach an agreement and bind the parties involved. If the seller could back out like that, it would defeat the purpose.
