May 19, 2024

Jocuri

Mad about real estate

Why Back Out on an Offer?

You may have done everything to make the sweetest purchase offer. You have exerted effort to make one that could not be resisted by your sellers. Hence, they ended up signing. Much to your excitement to proceed with the sale, you suddenly found a reason not to like the property. Your gut feeling tells you that it is a big mistake to proceed with the sale. Is there still any chance to back out? If so what are the reasons of backing out?

Yes, you should back out an offer when you have to. There are several reasons as to why you should do this. Take a look to the following rationale:

– Back out when the home inspection reveals defects: Would you want to buy a property and live your whole life trying to make repairs? For sure, you do not want this. If there are several major defects then there is no reason for you to waste your money on a liability.

– Back out an offer if you are funding your purchase from the proceeds your own sale: If you are heavily relying on your sale to buy the property, then you should not proceed with the purchase. This automatically renders the purchase impractical, as you cannot even afford to fund the transaction.

– Back out an offer if your mortgage was not approved: Mortgage is the life of your purchase. If were not able to borrow money to buy the property, then don’t you think there is no point of pursuing the purchase? Not unless if you have secured another mode of financing, then you can still go on with the transaction.

– Back out an offer if your employer did not relocate you: Okay, the purpose of your transfer was because you were assigned to another area for work. And this is precisely the reason why you purchased the property: for you to have a home when you are relocated. However, what good with the property will be now if you will not be transferred? Not unless, you want to own a second property to be used for a vacation house. That could be an acceptable reason.

These are the reasons why you should back out an offer, if you think you have to. However, there is one catch.  Each of these things should be stated in the purchase agreement as an escape clause. Remember, when the purchase offer was signed, it became legally binding. Sometimes, sellers may become overly disappointed to find out they were just waiting for nothing. However, the beauty of law allows you to get away if it is reasonable and if it has a legal basis. If you want to back out, do it through proper disclosure of conditions on the purchase agreement.

In addition, you also have to talk to your sellers. Sometimes, all it needs is proper communication to convince them. Nevertheless, expect that as the consequence to your withdrawal will be the forfeiture of the earnest money. However, this could be a minimal loss compared to a lifetime of regret.