Question Details

BillBurger, Home Buyer in Brooklyn, NY

Can a buyer cancel the deal after signing the contract?

Asked by BillBurger, Brooklyn, NY Wed Aug 11, 2010

If a contract is signed and a loan commitment hasn't yet been made can a buyer pull out?

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Short answer, maybe, but usually Yes. There is a list of contingencies that are often found in ratified contracts (ie, Financing Contingencies, Home Inspections, Appraisals). These contingencies must be removed before the deal can be settled. The most common contingencies that afford a buyer to pull out are the home inspection and financing. Most often, buyers will ratify a contract under the condition they get to perform a home inspection. If they are not satisfied with the inspection and are not able to come to an agreement to remove that contingency, then the contract can be voided. As far as a financing contingency is concerned, if a buyer has requested that contingency be included in the contract, usually accompanied by a time limit (ie a week or two) and are ultimately refused financing by a lender, then they can pull out as well. There are others, but those are the most frequent.

Hope that helped you.

Andy Piedra
Keller Williams Real Estate, Alexandria, VA
Andres.Piedra@KW.com
2 votes Thank Flag Link Wed Aug 11, 2010
A buyer can pull out of a contract anytime they want. The quesiton is are they subject to consequences for doing so. That depends. As mentioned earlier there are contingencies in a contract that the buyer could use to legally get out of a contract. As long as the buyer uses these contingencies properly, then in most cases would be within their right. If however they pass deadlines and cancel for unaccountable reasons, then they could be subject to at the very least a loss of earnest money or even legal ramifications.
1 vote Thank Flag Link Wed Aug 11, 2010
Mary, I've experienced the same thing here in NYC. Agents and brokers (the few I have dealt with) have given me completely false information or have withheld information and I don't take anything they say as factual unless it's in writing. I've confronted one of them and he just denied it. Best thing to do is compile all your questions in an email and request that the broker forward your questions to the seller and respond via email.

I recently met an agent who thankfully gives me straight up facts that I've verified through my own extensive research. Typically, I don't trust brokers if their tongues came notarized but after digging thru the mud long enough I found one of the good guys (gal I should say since she's an awesome lady).

Also, I was able to pull out of my contract and got my full deposit back too. I was lucky I pulled out BEFORE the seller signed so it wasn't yet binding.
There is a federal law 3 day right of rescission period but I don't know much about the details and then there's always cases of non disclosure and misrepresentation which is why you need a good lawyer to go thru everything with a fine tooth comb. I learned a big lesson and it's unfortunate to go into such a huge undertaking with boxing gloves on ready to challenge the dishonesty that runs rampid with many brokers. As if buying a home isn't stressful enough.

I will definitely report the last guy to the DRE, it didn't occur to me to do so. He just told me whatever felt like a good answer and it was so obvious that I made him ask the seller and reply in email.
It ended up being too risky of a deal and I'm grateful to have withdrawn in time.
Sorry for your ordeal. Thanks for writing in.
0 votes Thank Flag Link Thu Aug 19, 2010
To answer the exact scanario presented It depends what the contract says but if it's the standard contract that we have out here, expect to lose at least the \deposit (which was part of your down payment) that you left with your attorney when you signed the contract.
0 votes Thank Flag Link Wed Aug 11, 2010
Every state is different, you should talk with your Realtor or Real Estate Lawyer.

Good Luck,

Sincerely,
Pelin
http://www.dallashomelist.com
0 votes Thank Flag Link Wed Aug 11, 2010
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