Home Buying in 98117>Question Details

ayirpm, Home Buyer in San Ramon, CA

hi can you cancel a real estate contract after it is signed? Do you have to give up your earnest money?

Asked by ayirpm, San Ramon, CA Thu Jul 18, 2013

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To follow up on Dan's answer, the way more than 99% of agents complete the standard forms in Washington, the loss of the earnest money should be the most you are at risk. There is a small minority of agents who do not know what they are doing and select "election of remedies" on Form 21 (or Form 28) purchase and sale standard forms. That could expose you to an additional loss. If that is selected on your form, and it was something that your agent selected when you made your offer, I would recommend consulting someone else besides your agent. If you made the offer through the listing agent and that box was selected, you should consult an attorney ASAP.

If you are buying a bank owned property, there may be a bank addendum which overrides the Form 21 or Form 35 provisions. That is an example of how your situation can be very fact specific.

Same notice as on prior answer.
0 votes Thank Flag Link Thu Jul 18, 2013
If your agent is a member of Washington Realtors, they can access the Legal Hotline answer referenced in my latest blog piece.

http://www.trulia.com/blog/kary_l_krismer/2013/07/inspection…

For that analysis to have any application at all, you would need to have used the standard Form 35 addendum.

I would also repeat what others have said about the need to consult legal counsel in this matter. These situations can be very fact specific. For example, assuming the Form 21 purchase and sale contract was used (not the condo form), the lack of a legal description can make your contract generally unenforceable. An attorney should be able to fully analyze your situation.

Notice: This answer is not intended to provide legal advice, and in fact suggests the reader obtain legal advice. To obtain legal advice you would need to contact an attorney who would agree to review the facts of your specific situation.
0 votes Thank Flag Link Thu Jul 18, 2013
ayirpm,
You can cancel anytime. The consequences for canceling will be in your contract. If you are using the standard forms provided by NWMLS, your earnest money may be at risk, but would also be the most you are at risk.
You may have several legitimate options to cancel however, if you are in the proper time frames. This could include your inspection contingency, the seller's disclosure, title or neighborhood review just to name a few. The timeframes attached to these are in your contract.
Before you hire a lawyer, start with your agent. If you used the listing agent, you may want to review the contract carefully yourself first, the listing agent represents the seller first and foremost. They owe you a duty of professionalism, but not of full representation.
0 votes Thank Flag Link Thu Jul 18, 2013
This depends on the provisions in your particular contract.
In Washington, there are usually several buyer discovery addendums that include clauses allowing exit without penalty. Earnest monies are held in escrow, and if there is a legitimate legal cause for exit, monies can then be released back to the buyer. However, all clauses are not included in every contract. You would have to refer to the timelines provided in each individual addendum. If you have any questions about a contract already in force, an attorney or your Real Estate professional can show you the options provided in your purchase and sale agreement.
0 votes Thank Flag Link Thu Jul 18, 2013
I'll assume you are a buyer, and have negotiated a sales agreement with a seller, and have earnest money on deposit? Without knowing more information, no one in this forum can advise you about the terms of your contract. As Elisa recommended, you really should consult with an attorney that specializes in real estate contracts.

To begin with, you should pose this question to your agent --and the Managing Broker of the real estate firm that is representing you. They will have a better perspective on your circumstances, and they may be able to refer to an attorney with whom they have experience. Good luck.
0 votes Thank Flag Link Thu Jul 18, 2013
You really should consult an attorney. Real Estate Contracts are legal documents.
0 votes Thank Flag Link Thu Jul 18, 2013
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