When a buyer withdraws after signing the purchase agreement, there are almost always financial consequences. In most cases, the buyer forfeits the deposit of 10% of the purchase price, or must pay a penalty of an equivalent amount. Whether this actually plays out that way depends on the timing of the withdrawal and the contingency clauses included in the contract. In this article, we answer the most frequently asked questions on this topic, from financial risks to what a seller should do in such a situation.
What are the financial consequences for a buyer who withdraws?
A buyer who withdraws after signing the purchase agreement is, in principle, liable for a penalty of 10% of the purchase price. This amount is included as standard in most Dutch purchase contracts as a fixed form of compensation. If the buyer withdraws outside the statutory cooling-off period and without invoking any contingency clauses, the seller is entitled to claim this penalty.
In practice, this works as follows: the buyer typically deposits a sum equal to 10% of the purchase price with the notary. If the buyer withdraws unlawfully, that deposit is forfeited to the seller. If the buyer has not yet made the deposit, the seller can call on a bank guarantee or pursue the penalty through the courts.
In addition to the penalty, the seller may also claim additional compensation if the actual damages exceed 10%. This could include lost income, double housing costs, or the costs of a new sales process. However, the seller must be able to demonstrate the additional loss.
What are contingency clauses in a purchase contract?
Contingency clauses are provisions in the purchase agreement that give the buyer the right to cancel the purchase without penalty, provided a specific condition is not met. The most common contingency clause in the Netherlands is the financing contingency: if the buyer cannot obtain a mortgage for the agreed amount, they may cancel the purchase.
Other commonly used contingency clauses include:
- Structural survey: if an inspection reveals that repair costs exceed a certain amount, the buyer may withdraw.
- National Mortgage Guarantee (NHG): if the buyer is unable to obtain NHG, this gives them the right to cancel.
- Sale of current home: it is sometimes agreed that the purchase is conditional on the buyer selling their existing property.
Contingency clauses are only valid if they are explicitly stated in the contract and invoked within the agreed timeframe. If the buyer does so correctly and on time, the purchase agreement is dissolved without financial consequences for either party.
How does the statutory cooling-off period work for buyers in the Netherlands?
In the Netherlands, a buyer of a home has a statutory cooling-off period of three calendar days after receiving a signed copy of the purchase agreement. During this period, the buyer may cancel the purchase without giving a reason and without incurring a penalty. This right is established in Article 7:2 of the Dutch Civil Code and applies only to private buyers, not to professional parties.
The cooling-off period begins on the day after the buyer receives the contract signed by both parties. If the last day of the cooling-off period falls on a weekend or public holiday, the period is extended to the next working day. If the buyer wishes to cancel the purchase, they must do so in writing, so that there is clear evidence of the cancellation.
It is important to note that the cooling-off period applies only to the buyer. The seller has no comparable statutory right to withdraw without cost after both parties have signed.
Can a buyer still cancel the purchase agreement after the cooling-off period?
After the statutory cooling-off period has expired, a buyer can only cancel the purchase agreement through the contingency clauses or through the courts. Outside these two routes, cancellation is not possible without financial consequences. A buyer who withdraws regardless risks the 10% penalty.
Invoking a contingency clause is only valid if three conditions are met:
- The clause is explicitly stated in the contract.
- The buyer invokes the clause within the agreed timeframe.
- The buyer can demonstrate that the condition was genuinely not fulfilled, for example with a rejection letter from the bank.
Cancellation through the courts is possible if the seller fails to meet their own obligations, or if there is evidence of mistake, fraud, or undue influence. These are legally serious grounds that are not easily accepted. In practice, going to court is time-consuming and costly, and the outcome is uncertain.
What should a seller do if the buyer withdraws?
If a buyer withdraws, the seller must respond in writing as quickly as possible and clearly state whether they accept the cancellation or intend to claim the penalty. Doing nothing is not an option: failing to respond may create the impression that the seller has tacitly accepted the cancellation.
In practical terms, these are the steps a seller should take:
- Review the contract: check whether the buyer is acting within the cooling-off period or invoking a valid contingency clause.
- Request evidence: when a financing contingency is invoked, the buyer typically needs to provide two rejection letters from recognized lenders.
- Claim the deposit or bank guarantee: if the cancellation is unlawful, the seller can claim the deposit through the notary.
- Seek legal advice: if there is any doubt about the validity of the cancellation, it is advisable to consult a lawyer or notary.
- Restart the sale: once the situation has been resolved legally, the seller can put the property back on the market.
Bear in mind that an unlawful withdrawal delays the sale and incurs additional costs. Document everything thoroughly so that you are in a stronger position should a dispute arise.
How we help you sell your home
At Urban Homies, we guide sellers through the entire process, from the initial valuation to signing at the notary. We ensure that the purchase contract is properly structured, with clear agreements on contingency clauses, the deposit, and the cooling-off period, so that you as a seller face as little risk as possible should a buyer unexpectedly withdraw.
What we do for you:
- A detailed marketing strategy and professional presentation of your home
- Valuation based on current market conditions
- Guidance through negotiations and contract formation
- Full support with legal and notarial steps
- Aftercare following the transfer of ownership
Want to sell your home with the confidence that everything is taken care of? View our sales support services or get in touch for a no-obligation conversation.
