Many buyers push for the purchase of a home that they were never really sure of just because they were afraid of upsetting other parties involved in the sale. Similarly, there are sellers who reluctantly said yes to a deal they weren’t comfortable of. If you feel like you are about to make one of these decisions in the future, know that indeed, it is possible to back out from a real estate deal.
And you might have to do it sooner than later.
It’s true. A failed real estate deal might be a cause of stress and frustration for the parties involved. But proceeding towards an unsatisfactory end could only get you in more trouble – and more regret – than the perceived responses. It could be worse.
Talk about it
To begin with, it is important that you talk to your agent about your uncertainties. While they are keen on helping you sign a deal, they are also working for your best interest, and if the current deal is setting you off, they are the best people to gain advice from.
Tell them why you are having cold feet, or why you are starting to get unsure about the whole thing. They can give you professional advice on the matter, from both market and experiential perspective, and help you work a way towards a better end, whether it is proceeding with the sale, or backing out altogether.
Even if you are already in the contract phase of the purchase, you can still back out, although it may be a bit difficult than when you voice out the decision earlier. The following are your best ways out, without causing too much damage on everyone involved:
Issues with Inspections, Appraisals
A home appraisal is used to determine how much the property is valued at the market. Today, available housing remains in the low, making it possible for properties to have multiple interests. Sellers know this and take advantage of the fact by having an asking price that may be higher than how much the house is appraised for.
If the house has multiple buyers interested in it, you may have to participate in a bidding war where you have to sweeten your offer to get the deal. If there are none, a negotiation is made, where you can ask the seller to reduce the asking price. If they are unwilling to do so, you can opt out.
Another important thing is the home inspectionwhich reveals the improvements, repairs that need to be done to the home before a sale can proceed. You may ask your seller to do the necessary work before the deal can be closed. If they refuse, or if you are uncomfortable with the state of how much work needs to be done, you can use this as an excuse to back out.
The Kick-Out Clause
Meanwhile, if you are a seller and you find yourself with multiple interests on your property, it may be a bit risky to commit to one interested buyer, only to find out later that he or she is having trouble obtaining financing for the purchase. In such cases, you lose potential profit or advantage from better buyers who could’ve allowed you to close early.
To prevent these kinds of things from happening, you as a seller is protected by what is called the “kick-out clause” which allows you to continue showing the property to other interested buyers, usually when your buyer still need to sell their own property first before they could proceed with the purchase.
This is possible even when you are already in the contract phase. Should the seller come up with a better offer, they are not liable to stick to the deal with the first buyer and can therefore go with the better one.
Do it Early
As early as possible, back out before situations deemed too complicated can arise. The earlier, the better. The longer you are in the contract, the harder it is to get out as it can result in suits from the other parties involved. Talk to your agent, and then your seller about your doubts, and give adequate reasons (if the above do not apply) as to why you cannot proceed. Oftentimes, your buyer may be understanding of your situation. After all, you are also protecting your own investment. Additionally, see to it that you will not have trouble with your agent once you choose to do so.
Getting out of a contract-phase deal can be difficult, but definitely not impossible. Remember that you are choosing a place which will be your home for many years. You cannot let fear or uncertainty operate when it is your convenience, finances, and peace of mind at risk.Click to See the Latest Mortgage Rates»