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When Can I Back Out of a Purchase Contract for a Home?

December 28, 2016

When you make an offer on a home for sale, the seller has the option to accept your offer, reject it, or propose a counteroffer, which may be a different price or include contingencies. Once you and the seller agree to a price and a set of contingencies

for the sale, you sign a legally binding contract that obligates you and the seller to complete the sale.

 

Before moving forward with your home purchase, consider speaking with an experienced real estate lawyer to discuss your rights as a buyer and how to work through any disputes that arise with the seller before or after you sign your purchase contract.

 

You Can Only Back Out of a Contract Once You are “In Contract”

 

It is simple, but worth stressing: If you are not yet in contract to purchase a home, which means that you and any other party, such as a spouse with whom you are purchasing the home, have signed a purchase agreement. If you have not yet signed a purchase agreement, you are free to walk away from the transaction.

 

Even if you are in contract, you may still be able to back out easily. Many purchase agreements contain contingencies, which are conditions under which the contract is void. For example, if your contract states that your purchase is contingent on the home passing its inspection and the home fails, you can easily walk away from the contract.

 

Backing Out of a Contract Without a Contingency

 

But what if you do not have a valid contingency exit and you simply do not want the house anymore? Getting out of a contract can be more difficult in this situation. You signed a contract stating that you agreed to purchase the home under a certain set of circumstances, and those circumstances were met.

 

Talk to your lawyer about potentially backing out of the contract with the seller – the seller might be willing to terminate the contract. Explain your reason for wanting to exit the contract, such as a job reassignment, divorce, or your need to move to care

for a sick relative. The seller might be willing to work with you and terminate the contract, especially if there are other buyers interested in the home. There is a chance you will lose money by backing out of a contract, but if you truly cannot purchase the home, this penalty will generally be much less than the money you would lose by going through with the purchase and then reselling the home.

 

Work with an Experienced La Crosse Real Estate Lawyer

 

Buying a house can be complicated. If you are considering purchasing or selling a home, work with an experienced real estate lawyer to navigate the complications that can arise with your contract and other aspects of the transaction process. Contact our team of experienced real estate lawyers at Moen Sheehan Meyer, Ltd. today to set up your initial consultation with our firm.

 

 

 

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