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What to know about backing out of a real estate contract

On Behalf of | Apr 12, 2023 | Real Estate Disputes

One of the first steps to buying a Washington home is to submit a written purchase offer. If the offer is accepted, you typically spend the next several weeks securing financing, inspecting the property and taking care of other tasks related to moving into your new residence. Depending on the terms of the offer that you submitted, it may be possible to back out of the deal before the transaction closes.

Your offer may include contingencies

If your offer contains a contingency, it may be possible to back out without penalty. Common contingencies include passing a home inspection, obtaining financing or having repairs or upgrades to the property completed by a certain date. It may also be possible to back out of a deal if a seller fails to make required disclosures.

Your circumstances may change

You may find yourself in a real estate dispute as the result of a job loss, an unexpected expense or other reasons that might be outside of your control. Typically, a seller will be understanding of the fact that you can no longer afford to make payments on the home that you offered to buy. However, the seller will likely be entitled to keep your earnest money. The earnest deposit is made when your offer is accepted and is seen as a sign that you’re serious about completing the transaction.

You may put your earnest money at risk and potentially expose yourself to a lawsuit if you don’t adhere to the terms of a real estate purchase contract. However, doing so may be preferable to potentially being liable for expensive repairs that might cost tens of thousands of dollars to complete. It may also be preferable to the potential consequences of not making mortgage payments.