There are plenty of reasons you may want to back out of a real estate transaction.
The home inspection may have turned up costly issues, you may have found something better, or maybe you or your partner recently lost a job.
Whatever the reason, it is important that you understand the best way to back out of a real estate deal with little to no repercussions.
Generally speaking, the sooner you back out of a real estate deal, the better.
Ideally, you should speak up before you and the other party have fully executed the purchase agreement. If you can back out before the execution of the agreement, you may be able to walk away with minimal fallout.
If you and the other party have already signed the purchase agreement, you may be able to back out of the contract if the contract itself contains contingencies.
Contingencies of a real estate contract provide valid reasons that either party may back out of the transaction without legal repercussions. Common contingencies include the inability for the buyer to sell his or her current home, lack of approval for financing and a home inspection that reveals major issues.
If you cannot rely on contingencies to safely back out of the deal, try being honest with the seller. Sellers are human too, and they understand that unfortunate and unexpected events are a part of life. If you explain your situation to the seller, there is a potential that he or she will let you off the hook without consequence.
Finally, it is critical to note that you may have to pay for backing out.
If you cancel a real estate contract without relying on one of the valid contingencies, the seller has the legal right to sue. Even if the seller does not sue, he or she may seek reimbursement for expenses incurred up to the point of cancellation. He or she may also keep your earnest money, which is the deposit you put on the home.
If you have questions about your obligations and liabilities as a real estate buyer, contact Bashian P.C.