You thought you found a dream property. You put in an offer, the buyer accepted, and you started making plans for the big move. While waiting for this transition, you start to have second thoughts. Maybe rising interest rates have you concerned about the expense of the move, or a new job opportunity has you leaving the area.
Whatever the reason for the change of heart it is important to tread carefully when thinking of cancelling a real estate contract.
How can I cancel the deal?
The old saying about the devil in the details holds true in this situation. The ability to get out of a contract is guided by the language of the contract itself. This is one of many reasons why it is advantageous to have the document drafted to your situation instead of using a boilerplate, fill-in-the-blank agreement.
The first step is to look for contingencies. These are provisions within the contract that act like a get out of jail free card. A common example is a house inspection contingency. These provisions allow a buyer to back out if a home inspection results in findings of flaws within the property. Other common contingency examples include the need to obtain financing or sell a current property. If these contingencies are not satisfied, the buyer can cancel the deal.
What if there is not a contingency that applies to my situation?
It is still possible to get out of the deal, but it will be more difficult and could lead to a legal battle. One repercussion is the loss of any money put down to “hold” the deal. This can include earnest money.