Someone I know is purchasing a home and has already gone through the inspection, commitment period and all. While waiting on the lender and lawyers to get everything ready for closing, this buyer recognized a few reasons this purchase isn't a good idea for them and they're seriously considering backing out.
At this point, weeks after commitment and probably just a couple of weeks away from closing, the buyer expects to have to pay the ~$1k deposit/earnest fees built into the contract + the attorney fees for their and the seller's attorney. Buyer's lawyer warned that at this point, buyer may have to pay for closing fees as well since most of that work has been done, and that they could be sued by the seller. Whether or not the seller suing is a real risk and what damages it would be for is a bit up in the air - since the seller hasn't been living in the house for a while, from what I know, I doubt there are severe costs/damages the seller would sue for. What I question is that the buyer would be liable for closing costs if they back out before closing, on the basis that most of the work for closing has already been done. As for what this buyer would owe the lending bank, I can imagine the assessor fees and a title fee, and I believe they already paid for the assessor when the assessment was done.
Is it possible to incur closing costs by backing out of a real estate contract too late, even if it is before closing? If so, would that be full closing costs or just partial costs, and how can that be determined?