Default
When one side fails to do what the contract requires. Depending on the terms, the other side may be able to keep or reclaim earnest money, sue for damages, or force the sale.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
Default is the contract's word for one side not doing what it promised, and the remedies written next to it decide what a walk actually costs. For a buyer it is usually the deposit; for a seller it can be more.
Part 2 of 4
A simple example
The buyer misses the closing date with no extension and no reason the contract allows. You give notice of default and the contract says what comes next.
| Who defaults | What the contract commonly allows |
|---|---|
| The buyer, by not closing | You keep the earnest money, or sue for more in some contracts |
| The seller, by refusing to close | The buyer can sue for damages or to force the sale |
| Either side, by missing a step that is later fixed | Often nothing, if the other side keeps going |
Default is not automatic. Somebody has to call it, and the contract says what they can ask for.
Part 3 of 4
What people get wrong
That a buyer walking always forfeits the deposit. Only a walk the contract does not allow is a default; a walk through a live contingency is not.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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