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When selling a home, most sellers require "earnest money" as a good-faith deposit with any offer. Should a buyer break their contract unjustifiably, their earnest money is forfeited. This can be a substantial amount of money to lose.

Another consequence home buyers may face should they find themselves in breach of contract is the possibility of being sued by the homeowner, and possibly the brokerage firm they are dealing with. This can be costly if the buyer loses the case; can involve court fees, legal fees, and additional fees incurred by the home seller and broker during this process.

Finally, let's not overlook another important issue you must deal with upon breaking a contract. Your conscience. You have agreed to do something for or with someone, and not following through can cause them to endure hardships of their ow. For instance, if you agree to purchase someone's home, and break the contract after a month, you have caused that homeowner to take their home off the market for a month, and possibly losing a chance at another buyer. This causes the homeowner additional financial hardships. Perhaps they have already bought another place, or have packed up and are ready to move now. There are implications to everyone involved when a real estate contract is broken.

In any event, it is never a good thing to break a contract. However, there may be some cases where the circumstances may justify such a breach. It is always best to consult a real estate attorney, to avoid costly mistakes and decisions. The consequences of breaking a contract can be stressful and costly, and should not be taken lightly.

Learn more about this author, Jennifer Metz.
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