In retrospect, that does not sound like it was a very good move given that you now find what you consider to be significant flaws with the property.
I know that this is a challenging market for buyers, there are commonly multiple offers on many properties, offering amounts are going way over the asking prices and buyers are struggling to have their offers accepted. Waiving contingencies made your offer attractive to the seller and may have been the reason your offer was accepted. I am sure it seemed like a good idea at the time. Now you are seeking a way to change the offer that you wrote or cancel it.
Of course, you can cancel and forfeit your deposit but I know that is not the advice that you are looking for.
What does the person who wrote the offer for you advise you to do?
Refer to your document and contact your agent or an attorney for the support you require.
The only information you have provided is you offered to purchase a home with NO CONTINGENCIES.
This is the magic sauce that makes these offers work...No CONTINGENCIES.
A clean offer such as the one you made, No CONTINGENCIES, are more likely to be accepted.
The strategy WORKED!
You own a home because you were decisive and strategic.
You fail to disclose the situation of the sale such as auction or foreclosure an any of the many methods of disposing of distressed real estate. The available options depend on the situation and the situation suggest the contracts you have signed.
In ALL of these distressed sales the buyer must understand they are responsible for their due diligence. That means do your homework before you throw your money into the ring.
Now, pick up the phone and call a few contractors and get those things fixed that you can not do yourself. Celebrate your cleverness and the great deal you got.
Don't destroy your victory by filling your gardens with seeds of regret.
Celebrate and move on to the next chapter of your life.
By the way, soliciting the opinion of strangers on the internet, INSTEAD of turning towards the guidance of the one YOU HIRED, your REALTOR, to guide you, suggests there are other issues in play.
Here's what you and every buyer reading this needs to grasp. There are virtually no deals at all when buying foreclosures or bank owned properties. Repeat after me: There are no deals to be had buying a bank owned property. I say this based on 25 years of experience as a Realtor and someone with extensive building experience. I have been buying and flipping homes off and on for close to 35 years, I'm in the business and still I have never bought a bank owned property for myself. Why? Because there are no deals to be had in buying bank owned properties.
If buyers would like a deal for assuming the additional risks inherent in buying bank owned properties, then you're going to have to stop bidding on them for the next couple of years and allow the bank to choke on them.
When you buy a property "as-is" then 99.9% of the time it means just that, "as-is" I have helped many dozens of buyers successfully purchase these types of properties (after telling them their not going to be getting a deal) I know this to be true. I actually have gotten so fed up with the people who are hired to sell these properties that I have simply stopped dealing with them and will no longer work with buyers who insist on pursuing them. Without fail buyers underestimate the amount of work and the cost of correcting the problems these homes have. It's not that most are bad deals, they are not, most are at bet fair deals, the question is why would anyone want to pay market price to get a fair deal that's going to require a lot of work and money.
Our agent telling us to go with the property as all the flaws are repairable and house is worth to get. We are upset because the seller published in the ad words like completely rebuilt and brand new... But it is not like that.
In your situation, did you receive a Seller Property Questionnaire (SPQ) and/or Real Estate Transfer Disclosure Statement (TDS) from the seller prior to making your offer? How about a Natural Hazard Disclosure (NHD)? The TDS and NHD are both required by state law, unless you purchase a Bank-Owned property (REO).
Paragraph 6.A.(4) of the CAR Residential Purchase Agreement reads:
"If any disclosure or notice specified in 6A(1), or subsequent or amended disclosure or notice is Delivered to Buyer after the offer is Signed, Buyer shall have the right to cancel this Agreement within 3 Days After Delivery in person, or 5 Days After Delivery by deposit in the mail, by giving written notice of cancellation to Seller or Seller's agent."
I believe this overrides your "no contingencies", so this would be one way to get out of your contract and get your deposit back.
If you DID receive the above TDS (and an SPQ) prior to submitting your offer, another question for you is: did the seller disclose defects likely to affect the value or desirability of the property that should have been know to the seller? These would be significant flaws revealed by your inspections. If so, you may have grounds to cancel based upon the seller neglecting to disclosure relevant facts. However, this sort of thing requires legal advice, which we cannot provide.
Regardless of your specific facts, whenever the possibility of losing your 3% deposit is involved, we strongly suggest you seek the advice of a good attorney who specializes in real estate matters.
Assuming your 3% initial deposit is held in escrow, they will release it to the seller in one of 3 ways:
1. You sign to voluntarily give it up, either before or after mediation.
2. An arbitrator awards it to the seller.
3. You don't have the arbitration clause initialed and a judge awards it to the seller.
Best of luck!
Russ and Michelle
PS. Also curious like John, what does your buyer's agent advise you to do? Did you buy it from the seller's agent?
I will assume that you had an inspection contingency. If this is true and you haven't removed it yet, then you can do one of the following:
1. Cancel the deal
2. Negotiate price reduction/repairs/credits, or some combination of them
3. Proceed with the deal.
If you haven't released the inspection contingency yet then there should be no consequence for backing out, other than any money spent on due diligence.
If you have released your inspection contingency, then you are in a tight place. However, if your inspection contingency is still intact, just because you are buying the property in an "as is condition" - you are entitled to know what "as is" is. It basically is saying that I will not turn around and ask the owner for repairs, however, you should be okay with the repairs that need to be done. I would seek wise counsel if you are not working with an agent before you cancel the agreement , because your deposit maybe jeopardized.
Hope that helps,
In one of your posts, you said there are no contingencies and you are buying it "as is". This is unfortunate. You should discuss this with your real estate agent. If you need a real estate agent, there are many of us who can give you advice before you write an offer. This is why real estate agents are involved in the buying and selling of real estate.
Without looking at the purchase agreement, it is difficult for a real estate agent, a friend, a real estate attorney, or anyone else to answer your question of "what will be the consequences of backing out?"
Alain Pinel Realtors
Lic # 01856137
Are you working with a agent currently? These are questions you should be addressing with them they are working for you in your best interest.