You’ve found your dream home and have submitted an offer, only to get blindsided by one of life’s surprises.
When you make an offer, you’re committing to purchasing that home should your bid be accepted. If you’re unable to go through with the process, you may be able to legally withdraw your offer without penalty. However, if you don’t withdraw in the right way and at the right time, you could end up losing any good-faith deposits.
Each situation is unique, but by working with your real estate agent and following these guidelines, you’ll have a better chance of withdrawing your offer without penalty, should you need to do so.
Found your dream home, but then found another one? You might be able to withdraw your offer.
Before The Contract Is Signed
If you are still in negotiations with the seller and have decided that you can’t proceed with the deal, you can simply draft a letter with your real estate agent or with the help of an attorney stating that you don’t wish to go forward. No money should have changed hands at this point, so everyone can easily walk away.
In The Contingency Period
After you’ve submitted an offer, it’s been accepted, and the paperwork has been signed, you still have the contingency period to ensure that all agreed upon elements are as stated. For example, should there by an inspection contingency, and the report comes back highlighting a host of issues that were undisclosed, you can walk away as the conditions under contract weren’t met.
Financing is another major contingency; while you likely submitted a pre-approval letter with your bid, that doesn’t mean you can obtain financing based on what was agreed upon in the contract. You may also get an appraisal way out of line with the listing price that makes financing the property impossible.
Don’t remove contingencies from your offers under pressure of the market, as they are the easiest way that you can back out of a deal when a property doesn’t meet your criteria. Sellers are happy to move on to backup offers, and you can resume your search.
Everything seemed right when you visited the property, but what if there’s a surprise?
After The Contingency Period
If you went through the contingency process and now you want to back out, you’re going to find more obstacles. This is where a real estate agent can be your trusted advisor on how to move forward.
As soon as you start feeling like you want to get out of the contract, get in touch with your agent, and he or she will work with the seller to find available options. The faster you get the information out there, the easier it is for everyone to come up with a plan of action. Find out that you’ll have to relocate in a few months for work? The seller may be amenable to your situation and may let you walk without penalty.
However, in a legal sense, if you do walk away from a contract at this point in the sale process you may lose your deposits.
What You’ll Need To Do
The contract you signed with the seller is legally binding, so you’ll need to have the proper paperwork submitted to notify parties that you would like to withdraw. With your agent, you’ll draft a letter stating your reasons for withdrawing with as much relevant information as possible.
You’ll submit a letter whether you are walking away before the contract is signed or after the contingency period has ended. However, these stages have varying degrees of legal repercussion attached so always work with an agent and lawyer who is familiar with your location.
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