As as Home Buyer, the home purchasing process can be overwhelming. There are so many things to consider in making your decision. You have to differentiate between your needs or wants, choose the best location to meet your needs, research community amenities and so much more. Once you find the right house for you, come other Financial and Legal aspects to consider. Keep in mind that when you sign a Purchase and Sale Contract on a property, you are signing a legally binding document.
Here are 5 Things that Can Happen if You back out of a Purchase and Sale Contract:
- During Due Diligence Period
If during the Due Diligence period (usually first 10 days after the contract goes binding) you decide to back out of the contract, there are usually no Financial penalties that will apply to you. However, you will forfeit the home inspection fee that you probably already paid for the home to be inspected and any other fees you may have already paid for out of pocket.
- After Due Diligence Period
Once the Due Diligence period is over, buyer’s remorse will come with a penalty. Let’s say you decide you no longer like the kitchen size or the bedrooms are too small or you just change your mind on the property altogether. What can possibly happen right?
- The Seller can file a lawsuit against you that will inevitably force you to purchase the home.
- The Seller can legally claim and keep the earnest money deposit.
- The Real Estate Brokerages involved in the purchase and sale transaction can file a lawsuit against you to have the Real Estate commission paid.
- All lender fees, inspection fees, appraisal fees and any other fees already paid for the purchase of the home will be lost.
- You would have also lost very valuable Time.
As you can see, when deciding to purchase a home, it is important to be ready and fully mindful of the decisions that will be made. Once a Purchase and Sale Contract is signed, it has then become a legally binding agreement.
Do you have Questions or Comments? Please let me know!