Selling your home is one of the most fulfilling milestones you’ll ever make. Some even get extremely excited that they refer to DIY real estate services to do all the work involved in home buying. Meanwhile, prospective buyers rely on real estate agents to increase their chances of an accepted offer.
But what happens if you change your mind and want to back off from the deal. Here are ways to walk away from an accepted home purchase.
Consult your agent
If you have never tried backing out from a home purchase, your agent has probably experienced this multiple times before. Sometimes, your decision to walk away can make you feel as if you’re the very first person to cancel a home purchase. Trust is, many homebuyers have gone through the same experience because of certain factors, so you don’t have to feel embarrassed or alone in this.
This is why having a real estate agent will come in handy in the home buying process. You can disclose all your problems and ask for advice. If you’re already working with your agent from the start, you may have probably mentioned your plans to walk away at some point. Informing them about your plans early on is important so they can help you get out of the deal as smooth and quick as possible.
A skilled agent should give you advice throughout the process and shed light on whether you’re making the right decision or not. Your agent’s experience and expertise should provide enough assurance and serve as your guide from the beginning until the end of the buying process. In this case, it’s critical to find a reliable real estate agent who is knowledgeable about the housing market and the policies involved in buying and selling a property.
Read the purchase agreement
There are some ways to walk away from a contract, but the risk involved is whether you’re willing to lose your earnest money. Earnest money refers to the payment submitted along with the purchase agreement. The prospective buyer gives this to the seller to show they are interested in buying the property. You may choose to forfeit the sum depending on the reason why you want to back off.
The chances of getting your earnest money returned should be stated in the purchase agreement, so you have to read everything in detail. You can ask for your agent’s assistance in clarifying certain clauses or terms you find confusing. You may find yourself lucky if the contract has a specific cause for the buyer’s power to terminate the agreement because of inspection issues. This type of clause is meant to protect the owner or seller from legal issues associated with home repairs.
Your ability to terminate the agreement and the content of the contract may vary depending on the current state of the housing market. If the seller has plenty of interested buyers, the seller won’t likely get affected if someone walks away, especially during the first stages of the buying process.
There are other common reasons homebuyers back out of a home purchase. These include issues with the title, financing, appraisal, inspection, insurance, and construction permit. Changing of mind, unforeseen circumstances, natural disasters, or the failure of the seller to disclose an issue are possible reasons for walking away from a deal.
Communicate your intentions
The earlier you inform the seller of your decision, the more likely things will work out for both parties. Your agent can take immediate action by sending the seller’s agent the details of why you’re backing out.
If the property has a contingency issue because of a natural disaster or the seller didn’t disclose a certain repair issue, there’s a huge chance to get your earnest deposit back. But if the sole reason is a change of mind, you probably have to surrender the earnest money to the seller.
Once you’re done with the appraisals and inspection, the chances of receiving your earnest deposit decrease. Some states even allow sellers to sue a buyer for walking away without a certain cause. Although this may seem unlikely, it’s important to have your reasons prepared when deciding to walk away.
Buying a home involved a serious commitment, so it should never be taken lightly. If you plan to walk away from an accepted offer, communicate with the seller as soon as you’ve made the final decision. More importantly, coordinate closely with your agent to help you make the process smoother without facing any legal consequences. If it doesn’t work, you can always consult a real estate lawyer to know the best course of action.