Coldwell Banker Burnet
licensed MN Real Estate Broker
Thanks for the reply. I suspected this may be the case and I want to assure you that the feeling is normal and actually healthy.
Chances are you have put a lot of time, energy and thought into buying a house. You put more into searching for the perfect place and now it's all finally coming together. This process is the death of one process you've been doing for a while, the house hunt; but the birth of another, home ownership.
We grieve when something changes and that's okay. Trust that the time and energy you put into your process was well thought out.
I would encourage you to focus on the excitement of home ownership, of having time in your own place to decorate as you see fit, to entertain in and enjoy for years to come. If this is where you place your thoughts, the anxiety of making the major decision will decrease.
Let me put one cautionary word in here however. If you just woke up on a Friday and thought, "letâ€™s go look at a house" and were under contract on Saturday and you did no preparation, planning and or praying along the way, then maybe you should reconsider. Otherwise, relax and enjoy. Home ownership is a wonderful privilege.
Louise, the short answer to this question is consult an attorney. :) That's what my broker would want me to say to you.
With 20 years in this business, I can answer in part, as long as you know there are many variables that can change what I'm about to say.
In a MN purchase agreement, there are many places cited that can implement a cancellation of the purchase allowing everyone to back away with no harm done and earnest money refunded to the buyer. HOWEVER, those places are mostly set up for that to occur while there are still contingencies in place, like during inspection periods, appraisal work orders, etc. Once the transaction has rolled down hill enough that it's just prior to closing, it gets less likely anyone can back out without there being financial "damages" to be awarded to one party or another, or even litigation to force that party to "perform" or honor what they said they would do in the contract.
What you need to do FIRST thing is talk to your agent or your attorney, whoever is handling the transaction on your behalf to see what the wording in the purchase agreement says. If you don't have anybody representing you, that's a problem. You might want to seek out somebody in that event.
The exceptions to this is if you have an inspection contingency and something comes up on the inspection, or if you have a financing addendum and you are no longer able to get the rates and terms that you originally qualified for.
A Buyer can cancel a purchase at anytime, in most cases, but their earnest money would be lost if they don't have an acceptable escape from the contract. Read your purchase & sale, ask your agent or an attorney.
Now, if you are just having cold feet, be careful you don't make a big mistake. It can be perfectly normal ot have second thoughts, doubts and fears about buying a home and signing a mortgage. This only proves to me that you are a thinking and breathing human being who understands the nature of what you are doing. Just don't let the fear and worst case scenarios overwhelm you. If our worst fears control our action we wouldn't get out of bed in the morning.
The sellers can keep your earnest money and have the right to sue you for Non-performance.
Did you ask your agent? Or is your agent the same one as the sellers?
If you are the seller, you may get sued to be foreced to sell.
If you are the buyer, best case scenario is you will lose your earnest money and worst case is you could also be sued to purchase the property (specific performance).
Why do you wish to back out of the purchase? What ever is written in the signed offer will dictate what will happen. This is not meant to be legal advice.
At the end of the day - no one can "force" you to sign the paperwork and purchase the house. However, in good faith, you agreed to the purchase the home - and the property was most likely "taken off the market" for all intents and purposes by a "contingent" or pending status allowing you time to inspect the property, get all your ducks in a row, and secure financing. Often, when other buyers/agents see a property under contract, they won't bother making an offer on it (unless it's a "back up" offer).
It depends on your contract, but the seller is most often always entitled to some type of compensation for the wasted time. The buyer has to have some "skin in the game" when the terms are agreed to initially - otherwise anyone could just "back out" at any time and leave the seller to assume all the risk.
Bottom line - check with your attorney, real estate professional, or read the specifics of your sales contract.
Hope that helps!