What are the Legal Consequences of Seller Default?

The Risks of Termination
The Agreement between the seller and the buyer is a firm contract with clear terms, duties and performance responsibilities. The seller is obligated to sell, and the buyer is obligated to buy. If there are no remaining contingencies or conditions of either party, should the seller choose to terminate, they would be in default of the performance of the Agreement.
The consequences of a default by a Seller are detailed in the Purchase and Sale Agreement on page 6, Paragraph 2. Default. The remedies listed include Buyer Remedies, Broker Remedies and Attorney’s fees. The relevant language is copied here.
Paragraph 2. Default
b. Remedies of Buyer: In the event this Agreement fails to close due to the default of Seller, Buyer may either (i) seek the specific performance of this Agreement or (ii) terminate this Agreement upon notice to Seller and Holder, in which case all earnest money deposits and other payments Buyer has paid towards the purchase of the Property shall be returned to Buyer following the procedures set forth elsewhere herein, and Buyer may pursue any other remedy available at law.
c. Rights of Broker: In the event this Agreement is terminated or fails to close due to the default of a party hereto, the defaulting party shall pay as liquidated damages to every broker involved in this Agreement the commission the broker would have received had the transaction closed. For purposes of determining the amount of liquidated damages to be paid by the defaulting party, all written agreements establishing the amount of commission to be paid to any broker involved in this transaction are incorporated herein by reference. The liquidated damages referenced above are a reasonable pre-estimate of the Broker(s) actual damages and are not a penalty.
d. Attorney’s Fees: In any litigation or arbitration arising out of this Agreement, including but not limited to breach of contract claims between Buyer and Seller and commission claims brought by a broker, the non-prevailing party shall be liable to the prevailing party for its reasonable attorney’s fees and expenses.
As you can see, the potential costs of a seller default are significant.
1. Specific Performance. In a very strong Seller’s market, the Buyer has multiple reasons to elect to sue for specific performance: the uniqueness of the property, low inventory of similar homes in the market, and rising home prices. Should an action for specific performance be successful, not only would the seller be forced to sell, they would also be required to pay the buyers’ attorney fees and expenses of litigation. Fees for both the seller’s attorneys and the buyers’ attorneys can be extremely high. During the period of the litigation, the seller would not be able to transfer ownership of the property. In most cases, a lis pendens is filed by the buyer's attorney so this would put the world on notice that there is a pending lawsuit regarding the property.
2. Compensation to Brokers. Both brokers could sue the seller for the compensation that would have been earned if the contract closed per the contract terms.
3. "Other remedies at law" can include any consequential costs to the buyer such as living expenses, storage of furniture, transportation costs and other costs. Other costs could also be considered by the court in an action pursued by the buyers.
According to Georgia law, Terminations of a Purchase and Sale Agreement must be made by the Seller and not by the broker. However, the seller’s agent can assist in the preparation of the termination document and can send it to the buyer’s representative.
In most cases, it is unlikely that the buyer will walk away with only the return of earnest money. We encourage agents to advise the seller to seek their own legal advice in this matter before moving forward with the termination of a contract without a legal reason to do so.