In our previous blog, we covered the more common scenarios that happen after your offer is accepted on a home. In this blog post, we’re covering the scenarios of what happens if you or the seller wants to back out. If a seller accepted your offer, congratulations! You are one step closer to owning a home or property. What happens now can vary, but I’ll cover the different scenarios below.
Scenario 1: You Want to Back Out
Contingencies will determine how easily you can withdraw. If you’ve already signed a purchase agreement, it’ll be a little harder to withdraw but it may still be doable. If a contingency in your offer isn’t satisfied, you have two options. The first is to renegotiate with the seller to reach a point of mutual agreement, or you may be able to withdraw the offer, depending on the accepted contract.
Contingencies can be a safety net for buyers, but you can lose your earnest money deposit if you don’t fulfill your buyer obligations. Obligations mean following the deadlines and timeframes outlined in the purchase agreement.
In this competitive seller’s market, buyers have removed contingencies to make their offers more appealing to sellers. This means it will be harder to withdraw from the purchase agreement before closing. If there are no contingencies and you want to continue withdrawing from the contract, the seller has the right to retain your earnest money deposit. This is usually about 3% of the purchase price. For a $500,000 home, it could be a $15,000 loss.
Scenario 2: The Seller Wants to Back Out
A seller could have many reasons to change their mind, whether it’s accepting a better offer or deciding to no longer sell. The key is the timing of when they want to back out. If the seller chooses to withdraw their offer acceptance before signing the purchase agreement, there’s not much you can do. Similar to scenario 3, if the seller wants contingencies, but both parties cannot agree to, the contract can be canceled. If the seller decides to back out after signing the purchase agreement, they won’t lose their deposit, but they could have a lawsuit as they have breached the contract.
If you need help navigating this fast-paced seller’s market, contact me today! I’d love to help you find the home of your dreams this year. Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.
