What happens if a home seller who is under contract dies before closing?

The scenario: A seller dies unexpectedly just a few days before the agreed-upon Settlement Date. Her daughter says she has already initiated the probate process.

The buyer’s closing attorney informs the listing agent that if the executor is unable to close the transaction within seven days of the Settlement Date, the buyer will be entitled to damages for the seller’s breach.

Is that correct?

It is.

The first thing to remember is that the contract signed by the seller client remains binding. Paragraph 17 of Standard Form 2-T states as follows:

“This Contract shall be binding upon and shall inure to the benefit of Buyer and Seller and their respective heirs, successors and assigns.” This language obligates the Seller’s heirs and the personal representative of her estate to honor all of the Seller’s contractual obligations, including the obligation to complete the purchase in a timely fashion.

There is also a North Carolina General Statute that supports this.

There are a lot of hurdles to clear to make this all happen which would almost certainly be longer than 7 days.

If the buyer is unwilling to accept a longer period of delay, the buyer has the right to terminate the contract based on the Seller’s breach.

If the buyer exercises that option, the buyer would be entitled to all of the remedies outlined in paragraph 23(b) of the contract including return of the Earnest Money Deposit and the Due Diligence Fee and reimbursement of the buyer’s “Due Diligence Costs.”