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Buying a house is a big decision. Huge! It's where you'll be spending everyday of your life for the foreseeable future. You'll have a mortgage, and you'll probably be spending the next 30 years paying it off.
So, it's understandable that some buyers may have cold feet. Can you leave the seller at the altar and back out of your contract?
Offer and Counteroffer
You found a house you liked, and you made an offer. Until the seller accepts your offer, you can retract that offer at any time. There is no contract. Similarly, if the seller makes a counteroffer, both of you can change your minds until you accept the counteroffer.
The seller has accepted your offer, and both of you have signed your contract. Don't worry. There are still avenues for you to back out.
Many contracts have contingencies, or conditions that must be met before the deal can be closed. The most common contingencies include:
If you want to cancel a contract because of an unsatisfied contingency, you'll usually be able to get any deposit you paid back.
Breach of Contract
If you're all out of contingencies, and you still want to back out, you can breach the contract. Most contracts have a liquidated damages clause that specifies how much the seller will get when the buyer breaks the contract. In addition, you'll lose any deposit that you paid.
Technically, the seller may try to sue you for specific performance. The seller is asking the court to order you to go through with the contract. However, these types of lawsuits are rare and expensive for both you and the seller.
If you are considering buying a home or canceling a contract to buy a home, consult with an experienced real estate attorney to assess your options.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.