Imagine you've agreed to purchase a new home and although you haven't closed on the property, you've signed an agreement to buy the residence. The problem is, your situation has changed or you've discovered a "deal-breaker" pertaining to the property. Now you no longer want to buy it.
Since you're under contract to buy, you're concerned about whether you can back out of the deal. Backing out of a real estate deal after you've signed a purchase contract isn't always easy. However, sometimes you have an option to end such a contract.
Problems with the appraisal and inspection can provide an easy out. Most real estate purchasing contracts have a contingency clause that states the lender and buyer need to be happy with the appraisal and inspection in order to move forward with the deal. The results of the appraisal and inspection could result in more negotiations.
Imagine the appraiser quotes the home at a much lower price than the homeowner has offered you. This could be a viable reason to back out of your real estate deal. Alternatively, imagine the home inspector finds that the roof needs to be replaced or the home has a termite problem. These could also be reasons to cancel the purchase agreement.
If you need to, try to back out as early as possible. The earlier you make your decision to back out of your real estate deal, the better. The moment you are starting to get cold feet, you need to inform your real estate agent or your real estate attorney so they can take whatever steps are available or strategize possible solutions to help you get out of buying the home.
Buying a new home could be the biggest investment you make in your life. Only follow through with a purchase agreement if you're absolutely sure it's the right investment for you. If it's not, investigate your legal rights and options to cancel your real estate deal.