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How Death of a Party Affects a Property Sale

Updated: Oct 2, 2023

No one expects to die after signing a real estate contract, but sometimes, even the safest expectations can be upended. Should a buyer or seller die before completing their property transaction, what happens to the contract depends largely on which party is deceased.

If the seller of a property passes away, the title can still be closed. The responsibility of completing the transaction falls to their estate, who are obligated to fulfill the contract. Sometimes, a buyer may be able to renege on the deal by citing the seller's sudden death as a disruption of the contract's terms, which they may claim is now impossible to fulfill as written. Additionally, determining the seller’s estate postmortem can take a variable amount of time, during which the buyer may choose to terminate the contract and receive their earnest money back. With that said, in the absence of resistance from the buyer, there should be no issues with closing the title through an estate operating in place of the deceased seller.

However, more significant complications arise when a buyer passes before closing on their property title. While the contract remains in effect, technically forcing the buyer’s estate to complete the deal, this is not guaranteed. The buyer may not necessarily have had all the money procured before dying, so their estate may lack the financial ability to close the title. Additionally, estate funds have to be distributed in various ways, and it is unlikely that the property purchase will be high enough in priority to claim that money in the face of more important death-related expenses. A seller can attempt to complete the sale or file a claim against the buyer’s estate for lost profits, but the chances of these working are slim. At best, a seller can hold on to the buyer’s earnest money, but there are many roadblocks to upholding the transactional contract beyond that.

Ultimately, a real estate contract can be completed if the seller passes, but it is unlikely to go through if the buyer dies.


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