February 29th, 2016 at 11:25 pm
Answer: No. Your buyers are obligated to act in good faith and deal fairly with the sellers, but nothing in the RPA specifically requires them to give a reason for cancelling. In fact, without your clients’ permission, you should resist any urge you may personally have to explain your buyers’ reasons to the other side, because giving a specific reason may give rise to a heated dispute.
Let’s say, for example, your buyers decided to cancel because they don’t like the school district. If you told that to the listing agent, the sellers are likely to get very upset and claim they are entitled to the escrow deposit. After all, the buyers should have known about the school district from the time they wrote their offer. Of course, the sellers are unlikely to place any blame on themselves for failing to require the buyers to remove their contingencies.
Yet, if we were to all sit down and have a long discussion with your buyers about their cancellation, we are likely to discover that, regardless of the school district, they may have gone through with the purchase if the price was better, the mortgage payments were lower, the condition of the property was better, the neighborhood was better, and so on. Giving the sellers just one reason, such as “school district”, may cause an unnecessary misunderstanding between the buyers and sellers, when in fact, buyers generally have many other reasons for cancelling. So when the listing agent demands to know why your buyers are cancelling, in many instances you can honestly say, “Because of everything,” to diffuse the matter and help your buyers get their deposit back.
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