Home sellers’ and buyers’ guide to backing out of a real estate contract.
Are you wondering if you can back out of a real estate contract you’ve signed? Whether you’re buying or selling a home, you’ll be happy knowing that you can still back out of a contract, provided that you have a legal basis to do so. Otherwise, you may face legal consequences. Today, I will explain everything you need to know to back out of a real estate contract safely and legally:
Firstly, read and understand the contract before you sign it. Not all real estate contracts are the same, and contracts have multiple versions with different terms and conditions. This means that the consequences of backing out of a contract would differ depending on what was stated in the agreement you signed.
Next, consult your agent before you back out. That way, your agent can give you professional advice, or assist in negotiating to provide a solution as to why you want to back out of the contract.
The consequences of backing out of a contract differ for sellers and buyers. So, if you’re a seller, you have to know that most real estate contracts don’t offer a lot of reasons for sellers to back out, even if contingencies are added. This means that if a seller backs out for no justifiable reason, the buyer has a right to take legal action against the seller.
If you’re a buyer, real estate contracts typically provide several stipulations for buyers to back out of the contract, such as inspections, financing contingencies for mortgages, and more. So, if a buyer decides to back out based on a stipulation in the agreement, it means they have the right to back out and the earnest money can be returned to them. But if a buyer backs out for no justifiable reason, they won’t be able to get back their earnest money. In most cases, this will go to the seller.
In addition, the seller has the right to take legal action against the buyer because of one or more of the following reasons: they either lost time on the market, made repairs or upgrades requested by the buyer, or moved out of their home with the expectation that it would soon be sold.
If you have any questions about this, please don’t hesitate to reach out to me by calling 205-531-2747 or visit our website at http://www.briankelleher.kw.com. I would love to answer any of your queries. I look forward to hearing from you!
