The best advice on how to cancel a real estate contract is not to sign a contract that you are not sure of. Don’t let a pushy agent intimidate you into signing anything. Its your money and your decision. Seriously, if in doubt do not sign and find an Exclusive Buyers Agent that understands.
Here are some strategies to protect yourself when going to contract so that later you may have an option to cancel a real estate contract:
Use Contract contingencies. They are simply a way a buyer can cancel a real estate contract if they cannot meet the contingency in a timely manner. With contingencies, not only does the buyer have the right to cancel a real estate contract, they also get all their deposited monies returned to them.
Mortgage financing contingency:
Check your contract and make sure that your agent has a financing contingency with loan specifics in your offer. If you do not qualify for a mortgage under the terms specified in the contract, you should be able to cancel a real estate contract. You should not need to seek alternate financing but will need to provide proof that you did your due diligence in supplying the documents the lender requests.
Home Inspection Contingency:
A home inspection allows the buyer to learn more about the deficiencies in the home. A home inspection contingency allows the buyer to cancel a real estate contract if they find problems that they cannot live with.
Make sure the contract is subject to your approval of home inspections and do not box yourself into a tight time frame. Give yourself at least 15 days to inspect for anything and everything you want. If unsatisfactory to you, you then have the option to cancel a real estate contract as long as you are within your time frame to do so.
Even if you are paying cash, the contract can be subject to the appraised value being equal to or more than the purchase price. Order the appraisal after the home inspection and after you have your financing scrutinized by a reputable mortgage lender. If you have an appraisal contingency, that allows you to re-negotiate the contract. Either the seller reduces the price or you are free to not buy the property. You can then cancel a real estate contract.
Make the contract contingent on your attorneys approval. If your are stuck, discuss with your attorney. If your attorney dis-approves, you may be able to cancel a Real Estate Contract.
More Contract Escapes:
Last but not least, is the contract fully executed? Do you have a copy of the final signatures and did everyone sign and initial everywhere? Is the title to the property clear? Were there non-disclosed home owners association fees, like assessments or capital contributions? Did a survey show encroachments that were not disclosed? Did seller hide defects? Did a tree fall down? Are there changes to the property since the buyer signed? These are all issues that could allow a buyer to cancel the contract.
A buyer cannot be forced to close on a house, but depending upon how the real estate contract was written and the buyers performance, the seller may be entitled to keep the buyers escrow deposit. If a home buyer is serious about voiding a contract, it is always advisable to seek a legal opinion from a real estate attorney.
For a Real Estate Buyers Agents that understand home buyers rights, and know which contingencies are important, call Buyers Broker of Florida 407-539-1053