Homeowners could have various reasons for selling a property. Intentions to move or divest themselves of a rental home might sway decisions to put a house in the hands of an Ohio realtor. Would-be buyers may come in and make an acceptable offer, but they may also choose to back out later. Is it legally possible to back out of an agreement to purchase a home?
Dealing with home sales contracts
At closing, when the seller signs the agreement for the sale and the buyer signs the agreement to purchase, the transaction completes. At that point, the house has a new owner. Before finalizing the sale at closing, opportunities may exist to cancel the arrangement. However, the buyer may find themselves bound to rules in a purchase contract.
Pre-purchase agreements often involve putting “earnest money” down. This serves as a deposit. If the would-be buyer walks away from the deal, they may forfeit the earnest money. The seller then receives some compensation for taking the home off the market. However, there are other issues a seller and buyer must understand regarding earnest money. Namely, there are times when the serious buyer could get the earnest money deposit back.
Contingencies and sales contracts
Real estate contracts could include contingencies that allow the buyer to walk away and receive a refund on the deposit. If a home fails inspection or the appraisal reveals the property’s value is lower than previously believed, the buyer might be able to cancel. Sometimes, buyers could rely on a contingency if their financing for a mortgage doesn’t go through.
Buyers who walk away from the purchase contract may still find themselves involved in litigation, though. If the seller incurs expenses or suffers losses due to the buyer backing out, the seller might seek compensation in court.
Would-be homebuyers could walk away from a purchase offer. A real estate purchase contract may detail terms allowing a buyer to back out of the agreement. However, the buyer might end up losing a deposit and facing additional costs.