All over the country, it’s a vibrant real estate market. Accordingly, as a buyer (or sometimes a seller), you may have to make very rapid decisions to secure the home or other real estate you want.
As we all know, pressure and hasty decisions sometimes lead to dire mistakes. Therefore, after you’ve signed the real estate purchase agreement, you may re-evaluate aspects of the deal and want to back out. The question is can you back out without consequences?
There is good news; even after you sign the real estate purchase agreement, there are legal means to get yourself out of the contract if you act quickly.
For example, if the contract has been prepared by a realtor New Jersey required the contract to contain a three-day attorney review period for the purchase agreement and all other riders, contingencies, etc. This gives you time to go over your agreement with a lawyer in detail, to uncover concerns or problems with your deal.
You should also be aware that when you sign a purchase agreement, the buyer almost always gives the seller a substantial upfront deposit called “earnest money.” If you don’t take advantage of the three-day lawyer review period (or some other contingency), you may lose your “earnest money” and more. That could amount to tens of thousands of dollars!
There is no “simple” real estate deal, even when buying a family home. Once you sign the real estate purchase agreement, you’re only starting several serious steps that must be overcome before reaching a successful “closing.”
Appraisal contingencies, home inspections, and various “riders” or addendums are usually part of the transaction. If all these items are not completed timely, and in accordance with the terms of the contract you may have a way out, even after the three-day lawyer review period.
By working with a professional, knowledgeable, and thorough Moorestown or Browns Mills real estate lawyer, you can ensure these “escape hatches” are in the deal for your protection.
How Can a “Contingency” Help Me Back Out of My Real Estate Contract?
Most all real estate purchase contracts contain various “contingencies”. Contingencies are conditions that must be met to move forward with your real estate deal. These “contingencies” are mutually agreed upon and typically must be completed within a specific time frame.
Some examples of contingencies include:
- A home inspection – A licensed home inspector will inspect the home, its HVAC system, plumbing, and more. The contract contains this contingency. Your lawyer will be able to ensure it’s corrected, or you may get out of the contract.
- Securing financing with your lender – Your final funding must be approved, or you can back out.
- You must sell your previous home – Or the contract may be void.
- Your new home must appraise for a specific amount or more – Or you can get out of the deal.
A well-drafted, detailed purchase agreement, drafted by your real estate lawyer, should cover all pertinent concerns, and if not met, allow you to back out of the deal and get your earnest money deposit back.
What Are Some Reasons I Should Back Out of My Real Estate Deal?
The “common contingencies” are usually the cause, but there could be many reasons you must back out of your real estate deal, such as.
- You lost your job – Even if you’re a two-income household (which is frequent today), if just one of you loses your job, you may be unable to pay back any mortgage. A properly crafted contract will address this potential problem.
- The seller fails to make agreed-upon repairs or improvements – The seller hasn’t done the repairs specified in the purchase agreement or agreed upon later after the home inspection.
- The seller fails to disclose any pertinent issues or easements – If the seller fails to disclose material defect issues about the property you may be able to cancel the purchase agreement. Many things, such as “easements(someone else’s legal rights to use the land),” may be huge factors when considering the condition and value of a property.
- Issues with the property’s title – A “title search” should always be done before closing. Accordingly, if the seller has title issues, they may not be able to deliver you a clean title. In this case, you can almost always “walk away” from the sale and get your escrow money back.
These reasons, and many more, require the help and professional legal guidance of a Moorestown real estate litigation lawyer. Your local real estate lawyer often provides you with a “plan of action” that will, at the least, give you viable legal options to back out of the deal successfully. Remember, tens of thousands of dollars are often at stake!
Is It Ever “Too Late” To Back Out of My Purchase Agreement?
The answer is yes. However, it’s much more complicated than that. The answer to this question almost always depends on the circumstances involved. A competent, detailed real estate lawyer will thoroughly analyze all aspects of your situation and always give you the best guidance possible.
With a lawyer’s guidance, you should be able to resolve any issue outside of a courtroom without the expense of a lawsuit.
I’m Considering Backing Out of My Real Estate Purchase Agreement; How Should I Proceed?
Purchasing a family home, business, land, or any real estate is a serious commitment and should never be taken lightly. If you’ve signed a real estate purchase agreement and need to back out, consult your local Moorestown or Browns Mills real estate lawyer immediately.