What Happens To My Real Estate Contract If My Vendor Or Buyer Passes Away?

How To Deal With Real Estate Transaction If Your Buyer Unexpectedly Dies

Sometimes in real estate, you find yourself making a perfect contract with another party. There’s good faith in the agreement, both parties are satisfied with the price, you’re eager to make the purchase, and everything comes together smoothly. But even in the best of situations, things can fall apart due to unexpected circumstances. In rare situations, a buyer or seller dies before the transaction is completed. What happens to the real estate contract in that situation?

Learn more from a Gilbert real estate attorney about how real estate transaction complications can arise and be dealt with when one party passes away before the transaction has been completed.

The answer to what happens to a real estate contract if one party passes away really depends on who dies. If the seller is the deceased, his or her estate is obligated to complete the real estate contract. However, if the buyer is the party who passes away, the seller may not be able to force the contract against their estate. One potential option for the seller is to file a claim against the buyer’s estate for lost profits, but this could cause the seller to run into more complications when they try to complete the purchase. For example, if the buyer was about to borrow money in order to pay for the real estate, it’s unlikely that the estate will be able to have similar borrowing power. The buyer’s estate may simply be unable to financially complete the purchase.

Arizona probate law contains a list of priorities outlining how estate funds should be paid. Unfortunately for a seller, an uncompleted real estate contract is not likely to be a very high priority. The money that the buyer had intended to use for purchasing the property may be needed for different purposes, such as administration of the estate; medical expenses; funeral and burial expenses; family allowance to a spouse, child, or other relative; and other uses, all of which will take priority over a real estate contract made by the decedent when he or she was still alive. Enforcing a sales contract after a death is just not a high priority for probate court.

Due to the complications of this situation, both parties will want to work with an experienced Chandler real estate attorney for advice and information on Arizona laws relating to this unusual situation.

Real estate transaction in progress

When the Buyer Dies Before the Transaction is Completed

If the buyer in a real estate transaction passes away after the contract has been signed but before the title has been actually transferred to the new owner, the real estate is considered an estate of inheritance. This means that the buyer’s beneficiaries or heirs will inherit the rights to the contract and will have to make the decision of how to proceed with the real estate closing. Circumstances, such as the financial situation of the estate, may dictate the decision.

When the Seller Dies Before the Transaction is Completed

If the seller dies, the buyer may be able to work with his or her San Tan Valley business lawyer to argue that the delay of the closing date is sufficient reason to terminate the transaction. The buyer could potentially abandon the contract due to the unfortunate and unforeseen circumstances of the death of the seller and be able to do so legally, because most sales contracts have deadlines that must be adhered to by all parties involved. The delay of transferring ownership of the estate may prevent the sale from taking place during the agreed upon timeframe. Additionally, the buyer may also be able to terminate the contract on grounds of frustration since an unexpected event has made it impossible to fulfill the contract as it was originally written.

The Bottom Line

In most cases, if a seller dies prior to the completion of a real estate transaction, the seller’s executor or estate is obligated to complete the transaction on behalf of the deceased person. There may be a delay to the completion of the real estate transaction while an executor is recognized as the legal administrator of the deceased’s estate. This delay can be problematic and frustrating if the transaction is part of a larger real estate transfer, such as a development.

If the buyer passes away before the contract has been fulfilled, the beneficiaries will make the final decision, but the financial situation of the estate and priority within probate court may prevent the buyers from being able to uphold the contract.

Get an Experienced Commercial Real Estate Attorney on Your Team

If you need a business lawyer or commercial real estate attorney, Denton Peterson Dunn is ready to represent you across a wide variety of cases and situations. We have big firm experience and success with the personalized touch of a small firm. Schedule your consultation with us today!


Brad Denton, Business Lawyer
 – Denton Peterson Dunn

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